Economic impact of Missoula tourism at $360M; most taxes go to state’s general fund
Martin Kidston/Missoula Current
While visitation and tourism took a hit during the pandemic, Montana emerged as a safe getaway with its sparse population and open spaces.
Missoula captured its share of that traffic and its tourism arm at Destination Missoula is now working to push visitation and spending back to pre-pandemic levels – an investment into the jobs and taxes it brings back to the community.
Barb Neilan, executive director at Destination Missoula, said tourism accounts for $294 million in direct expenditures in Missoula each year, and $360 million in total economic impact in visitor spending. It's up to Destination Missoula to promote the city and keep those numbers strong.
“Tourism is a huge part of our economy in Missoula,” Neilan said. “The money that's collected just in Missoula accounts for $19.7 million in state and local taxes.”
To reach an outside audience, Destination Missoula this year has advertised in Seattle Magazine, Outside Magazine and Good Housekeeping.
Neilan said the organization's website now claims 1.2 million unique visitors each year and 231,000 annual inquiries. It also claims 78,000 followers on social media.
“It's a range of different markets we're trying to reach,” Neilan said.
Of the revenue brought in by the state's 8% accommodation's tax, around 4% goes back to promote state tourism. Destination Missoula gets a share of that to promote tourism at the local level and to support tourism-related businesses and projects.
That includes a “recreate responsibly” campaign and a revenue guarantee to support new commercial air service at the Missoula Montana Airport. That program has been successful in recent years and helped bring American Airlines to Missoula with direct service to Dallas/Ft. Worth.
“Right now, we're the only organization supporting Missoula's air service guarantee fund,” Neilan said. “With the expansion of the airport, it's going to have capacity now to bring in more flights and to start talking again to new airlines to bring them in. We want to have some money to back them up.”
Neilan said the largest portion of tourism spending in Missoula goes to gasoline, followed by bars and restaurants, hotels, retailers and groceries. The number of visitors coming to the city – and those who already live here – prompted Destination Missoula to launch a new campaign on how to recreate responsibly.
“We were able to start seeing a return of people before everyone else did. But it also created some issues we haven't had before,” Neilan said. “We had a ton of first-time recreators, not just visitors but residents as well. We started a pretty massive recreate responsibly campaign, which we're still continuing to this day.”
Still, the disbursement of taxes generated by the state's 8% accommodation's tax and 4% tax on car rentals remains a source of frustration, both for Destination Missoula and for city and county officials.
Missoula and other municipalities in recent years have lobbied the legislature to support a tourism tax to bring more revenue into local communities for other needs, which are currently supported primarily by property taxes.
Of the 8% accommodation's tax, 3% goes back to the state's general fund and of the 4% tax on car rentals, 75% of it goes back into the state's general fund.
“That's where the hiccup is,” Neilan said. “I know the argument is that we're not getting money from visitors – we are. It's just going into the state's general fund and not back out into the communities as it should.”
If the state were to allow cities and counties to adopt a local-option tax, it could help relieve property taxes and take the burden off car rentals and hotels to carry alone, advocates contend.
“The local option tax allows you to spread things out a little more, and you can decide what that's going to be put on,” Neilan said. “Right now, everything is pretty heavy from car rental agencies and hotels. That's where the money is coming from. A local-option tax allows you to spread that out over more avenues.”