Hoteliers look to expand Missoula’s Tourism Business Improvement District citywide

The Tourism Business Improvement District charges hotel visitors in Missoula a flat fee of $2 per occupied room night. That funding is directed back to the local district, which uses it to promote tourism and businesses and host events. (Martin Kidston/Missoula Current file photo)

Members of the City Council on Wednesday signaled their preliminary intent to expand Missoula’s Tourism Business Improvement District citywide, bringing it on par with 17 other districts established across the state.

Doing so would grow the program from roughly 20 participating hotels and motels to 33 and increase the revenue used to promote tourism and business development in Missoula by around $390,000 a year.

“We’re the only TBID in the state right now – there are 18 total – that is not a full TBID,” Mimi Gustafson of Destination Missoula told members of the City Council. “It puts us behind when we compete with other cities for events and the different things to bring to Missoula.”

At the request of hotels and motels, the state Legislature in 2007 passed a law permitting cities to establish a TBID. In the early days, only Missoula and Billings took advantage of the program, though it has since expanded to other communities that recognized the benefits of self promotion.

Under state law, however, a TBID can only exist for 10 years. If it wants to continue or expand, hoteliers must submit a petition. State law also mandates that the petition be tabulated based on the square footage of properties in the district.

Following that theme, property owners in Missoula have met the threshold and are petitioning to both renew and expand the district, according to Marty Rehbein, director of legislative services for the city.

“We have a petition that’s been filed by 65.58 percent of the square footage of the district,” she said. “It represents over half of the hotel-motel properties in the city.”

The program charges hotel visitors in Missoula a flat fee of $2 per occupied room per night. That funding is directed back to the TBID, which uses it to promote local tourism and businesses and host events.

That includes music festivals, sports tournaments and marketing Missoula to the outside world.

“One of the things we’re most proud of is the economic impact we give back to Missoula,” said Gustafson. “We funded over 58 different events in Missoula over the past nine years, which has had an economic impact of over $23 million to Missoula.”

Barb Neilan, director of Destination Missoula, stands with Cris Jensen, director of Missoula International Airport, when announcing American Airlines’ launch of service in Missoula. The flight was secured in part using funding generated through the city’s Tourism Business Improvement District. (Martin Kidston/Missoula Current file photo)

The funding has also gone to grow Missoula’s air service. Destination Missoula and the Missoula TBID played a leading role in contributing to the revenue guarantee that helped bring American Airlines to Missoula with flights to Dallas and Chicago.

Advocates believe air service has a direct impact on bringing visitors to the city and helping local businesses compete on the national stage. Destination Missoula markets the city in many of the destinations served from Missoula International Airport.

“Destination Missoula and TBID has given up to $250,000 for this effort to expand air service into Missoula, recognizing it’s a critical component for our area and for our visitors and our overall economic development,” Gustafson said.

Gustafson said marketing Missoula benefits a wide swath of the community and brings in more visitor spending. Hotel occupancy rates have risen as a result, from 55 percent nine years ago to 65 percent in 2017, one of the strongest rates in Montana.

While some hotels willingly participate in the program, all hotels benefit from the activity it generates. Expanding the district citywide would establish equity and benefit the wider community, advocates said.

“A lot of the sponsorships for big events and events that take place in Missoula are in part financed and supported by the money that’s collected through the TBID,” said council member Mirtha Becerra. “We’re lucky to have a successful TBID that can put money back into the community and make some of those events more affordable and feasible for the people trying to promote their business or an activity in Missoula.”

To overturn a TBID, Rehbein said, more than 50 percent of the owners must sign a protest. It can also be done if more than 50 percent of the district’s total taxable value signs a protest.

Council member Jesse Ramos voted against the district’s expansion, saying the 65 percent of hoteliers who signed the petition wasn’t enough.

“I feel like a lot of these donations can be made on a voluntary basis,” he said. “With the 65 percent, it’s just not quite enough for me to support it.”

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