City Council expands Missoula’s Tourism Business Improvement District

Missoula’s Tourism Business Improvement District now extends citywide, giving all local motels and hotels the option to collect a nightly $2 per room fee to help promote the city as a tourism and event destination.

A unanimous City Council renewed and expanded the TBID Monday night for another 10 years – from 2020 to 2029 – and hailed the district’s successes in its first decade.

Events financially supported by the TBID delivered an economic impact of $27 million over the past nine years. Tourism is now virtually tied with agriculture as Montana's leading economic sector, with a $4.7 billion annual impact.

Several council members asked that in the years to come, the TBID reach out to Missoula’s small hotels/motels and be certain to include them in promotions, lest they be overwhelmed by the city’s increasing number of large chain hotels.

And a few lamented the fact that state law prohibits the use of TBID collections for infrastructure – such as a local visitor center. TBID funds can only be used to promote tourism and recruit visitors, meetings, conferences and events.”

“What is really encouraging is that after 10 years, the TBID has proven that it is paying for itself,” said Councilwoman Heather Harp, who put in a plug for Missoula’s smaller hotels and their charm.

Barb Neilan, executive director of Destination Missoula and the Missoula TBID, said smaller hotels actually benefit more from the district’s promotional efforts than do the larger, corporate-owned hotels.

“The larger hotels have large corporations behind them and large marketing budgets that promote the brand,” she said. “The small hotels don’t have that, and that’s one of the reasons we exist. We are the marketing arm for the smaller hotels.”

Destination Missoula has a sales team that is on the road every day, working to bring sports and cultural events, meetings and workshops to the city, Neilan said.

And the TBID provides grants to help local events get off the ground or to expand – 64 in its first decade, including the Big Sky Documentary Film Festival, Montana Special Olympics Summer Games and the Region V Power of One Conference.

Teams – and families – coming to Missoula for sports events often choose the city’s smaller hotels, both because of their proximity to venues and for their oftentimes lower rates, Neilan said.

All local hotels and motels benefit from the TBID's promotion of Missoula, she said. But not all collect the bed tax. Missoula is the only city in Montana where participation in the TBID is voluntary.

“Tourism equates to economic growth and vitality,” said City Clerk Marty Rehbein in presenting the renewal and expansion request to council members. “Every business that comes to Missoula from outside the city begins with a visit.”

The TBID is also a major funding partner in providing the revenue guarantees needed to lure more airlines to the city – including American and Frontier – with a contribution of $50,000 per year.

The result, Neilan said, is that Missoula now has the lowest airfares of any city in Montana.

Missoula also has the second-highest hotel/motel occupancy rate (63.5 percent) in Montana, second only to Bozeman (70 percent), Neilan said. By comparison, Kalispell has a 34.4 percent occupancy rate, Billings 53.3 percent and Helena 55.9 percent.

City Council members Jesse Ramos, Michelle Cares and Julie Armstrong were absent Monday, so did not participate in the vote on the TBID's renewal. Councilwoman Mirtha Becerra abstained because her workplace has benefited from a TBID grant.