Tourism Tax Mulled for Teller County and Pikes Peak Region – Rick Langenberg

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Will the third or fourth time emerge as the charm for Cripple Creek with a possible bid for a lodging tax, and can Teller County unite behind the push for regional tourism?

Will the local area get a good bang for its buck or get gobbled up by the big business players down the Pass?

These are some of the questions that have emerged, following a presentation last week by Doug Price, the president of the Colorado Springs Convention and Visitors Bureau (CSCVB), and Cathy Ritter, the director of the Colorado Office of Economic Development and International Trade, before the Cripple Creek City Council.

In an effort to generate a stronger tourism treasure chest and compete with other major travel destinations, Price unveiled an ambitious plan to form a regional marketing district. The effort may require an additional lodging tax for overnight guests and for users of area attractions.

More importantly, Price cited the campaign as a way to support a prime area for attracting travelers that has fallen way behind the tourism promotional funding curve. But ironically, he described the region as a spectacular spot for visitors with its abundance of attractions, natural assets and spots for entertainment and history, such as the Cripple Creek and Victor district. He even cited Cripple Creek as a prime example, with an estimated $39.4 million in local infrastructure investments into the community in current and future projects, aimed at attracting more visitors. Throughout the region, he cited $770 million in tourism-related infrastructure in place and a laundry list of 35 projects.

Moreover, he believes the time is right for the area to reinforce its tourism and entertainment-related investment through a stronger marketing effort.

“We need to increase your promotional budget,” said Price, when addressing the city council. “You have a great story to tell. You got an opportunity.”

But part of this opportunity could include Cripple Creek and even much of Teller County gambling on the merits of plans for a future 2 to 4 percent lodging tax on overnight guests and a tax for users of tourist attractions. The latter tax would have to get the approval of state lawmakers, as currently attractions can’t be taxed under state law.

The idea of a lodging tax, though, could ignite a storm of controversy in Cripple Creek. Past bids to do lodging levies, which are assessed on the room bills of overnight guests, have received stern opposition by local casino operators. Several attempts at a lodging tax have been badly rejected by voters, or in some cases, didn’t make it to the ballot stage due to much opposition. But this time, tourism leaders in the region are sweetening the pot by only agreeing to tax rooms that are used by paying customers. This would exempt comp rooms in Cripple Creek, which represent about 50 percent of the hotel/motel rooms controlled by casinos.

Not Keeping Up with Our Competitors
The impetus behind the tourism funding campaign is the fact that the Pikes Peak region is falling dreadfully behind its competitors in promoting its amenities, according to Price. In fact, the region barely ranks in the top 20 for monies used to promote tourism for a destination area, referred to Destination Marketing Organization dollars. Colorado Springs, through its lodging and rental car taxes, generates about $3.4 million a year for tourism promotions. That compares with $18.8 million for Denver and $19.9 million for San Antonio, Texas, which is leading the tourism-funding pack in a region that encompasses a number of nearby states.

On a per capita basis, with the amount of lodging rooms in the area, the funding picture is quite dire for the Colorado Springs and Pikes Peak area.

Price says CSCVB wants to elevate this tourism-related funding dramatically through the formation of a local marketing district. The money generated from new taxes would only go into tourism promotion for participating entities. He wants to increase this tourism funding to more than $8 million a year

Another side factor is the recent announcement by Frontiers Airline to start daily flights between Colorado Springs and Las Vegas and the prospects for more travel activity at the under-used Colorado Springs Airport. Most tourism leaders see this as a boon to the area. “Air access is critical,” said Price.

If certain locales, such as Cripple Creek and Woodland Park, agree to become part of the marketing district, they will reap the benefits, according to the CSCVB president. However, the promotions would be orchestrated through the CSCVB and not by the small cities that participate.

The reaction to the plan was mixed. Marc Murphy, the general manager of Bronco Billy’s, endorsed the idea. “I would support it. It is the right thing to do,” said Murphy.

He indicated that the casino industry would benefit from any effort to give Colorado Springs and the region a tourism bump.

The meeting was attended by many casino operators and marketing officials in Cripple Creek. A few other casino managers took the Fifth and declined to publicly comment on the plan. The fact that any proposed tax would not impact their comp rooms came as a big relief to casino operators who attended the meeting.

City Administrator Ray DuBois raised questions about the inclusion of Cripple Creek into the overall tourism marketing plans. “We are pretty small fish,” said DuBois. “We are not very big contributors.” He also urged Price to tout the effort as a way to promote the entire Pikes Peak region and not just Colorado Springs.

The coordination of the plan drew some questions by the city council. They wondered if the city could use some of the funds to do its own promotions. Under the current plan, that wouldn’t occur, although participating areas would have much say in future television advertisements and other promotions orchestrated through these funds.
The plan won’t occur overnight. Price doesn’t expect the city of Colorado Springs to vote on becoming part of the tourism marketing district until April 2017.

Cripple Creek Marketing Director Steve Kitzman says he supports the concept, but contends that many steps have to occur. He said a number of legal questions also have to be addressed.