At look @ Heads & Beds in: Custer County Custer County Tourism Board February 25 th, 2014 Updated May 12, 2014 Cindy Howard, Treasurer.

At look @Heads & Beds in: Custer

CountyCuster County Tourism Board

February 25th, 2014Updated May 12, 2014

Cindy Howard, Treasurer

Who? What? Where? When? & Why?

• What/Where– A County Lodging Tax of 2% on all Taxable sales

of Lodging in “Custer County”

• When• Resolution No. 07-07 – adopted June 5, 2007• Ballot Question Tuesday, November 6th, 2007• Ran 4 times in the “official” newspaper, prior to election• Voters approved ballot question• Tax collections began Jan 1, 2008• First collections not received until May, 2008 for Q1/08• Ballot Question paid back (our ½ $2,148.67 -

Road&Bridge)

Ballot Question

• Shall Custer County Taxes be increased by a projected amount of $25,000 annually through the implementation of a two percent (2%) tourism lodging tax assessed on rooms or accommodations by any person or entity renting a motel, campground, or hotel or similar enterprise located in the county of Custer for less than 30 consecutive days, pursuant to C.R.S. 30-11-107.5 beginning January 1, 2008 and by whatever amount future collections of such lodging tax total, the revenues from such tax to be used exclusively for advertising and marketing of local tourism, to be administered by a board of at least three persons from the tourism industry within the County of Custer appointed by the Commissioners of Custer County, which shall be to the extent feasible, to advertise and market tourism for the benefit of Custer County.

Who?

• Who– All Lodging Vendors except FS Campgrounds

• Motel• Hotel• B&B• Cabins• Vacation Homes• RV Parks & Commercial Campgrounds• Conference Centers, whether or not Tax-Exempt

– All TAXABLE Customers of Lodging Vendors:• Any Consecutive Stay less than 30 days• Except NON-TAXABLE Customers

What is Tax Exempt?• The purchase is included under, and is part of, the regular religious

or charitable functions and activities of the organization, or is purchased in a government capacity.

• The transaction is billed directly to the organization and payment is made directly from organization funds. (Purchase of food or lodging by individuals do not qualify for the exemption even though the individual will be reimbursed by the organization or government).

• The participants at the event have not and will not reimburse the organization in any way for the event such as by purchase of a ticket, payment of a registration fee, or by making an involuntary contribution.

• ALL OF THE ABOVE STATEMENTS MUST BE TRUE FOR THE PURCHASE TO QUALIFY FOR TAX EXEMPTION.

• $100 “Cash” Rule

Why?

• To Collect revenue for additional Marketing in the county

• Not a property tax or local sales tax on all sales

• The CCMCC had a limited budget, although they were already doing the visitors guide, events calendar and sponsoring many events

• EDC Goal of the Tourism & Marketing Group

EDC 2008!

• Business and Community Dev. – Community Leader: Dee Hoag

• Natural Resources – Community Leader: Robin Young

• Human Resources – Community Leader: Kimberly Stein

• Tourism and Marketing – Community Leader: Angie Arterburn

Lodging Tax 101: (a recap)• 2% County Tax on Lodging Sales

• Governed by State Statue

• also by CCTB By-Laws

• Annual County Budget Process

• Annual Fiscal Audit

• Open Meetings – Sunshine Act

• BOCC makes Appointments

• CCTB Elects it’s own Officers

FUN FACTs & other things you might really need to know

• Top 2 MOST important financial terms/acronyms in the lodging industry:– ADR – Average Daily Rate– NOT the Rack Rate!

• After Discounts, Lower Rates for groups, weekly, etc.

– OCC – Occupancy Rate• What percentage of your rooms were rented• Daily, Weekly, Monthly Annually.• The most important is the Annual Occupancy

Rate!

Why?

3) Appraising what your business is worth:– Commercial Appraisals consist of:

• 1) Market Approach: real sales comps!

• 2) Cost Approach: (replacement cost – depreciation)

• 3) Income Approach:– GIM: Gross Income Multiplier

» Banks/SBA: @3.08 – 4.0» Patel – 2.75

Why?

2) Lending to Lodgers is a Hard Sell!-Record Foreclosures-Sustained Economic Downturn-Proof of Income – last 3 years P&L’s!

3) Knowing what your sales trends are!

Got PMS?GDS?

• PMS = Property Management System• Online Booking Engine (website)• Jack Rabbit – Colorado.com

• GDS – Global Distribution– Very high Fees– 30% + leakage

• CHLA tracks occupancy & follows trends

Why?

Colorado Occupancy

Colorado ADR

County Lodging Tax Collections:

Cash basis Vs.

Accrual2014201320122011201020092008

2,9652,9731,7561,9683,5632,5910Q13,2211,9411,9731,3811,6051,415Q28,7046,7605,8374,8854,6926,671Q3

11,3009,6599,90710,4378,1889,076Q42,9652,9731,7561,9683,5632,591Q1

$26,198$20,116$19,685$20,266$17,076$17,162Q1-Q4/Cash

$26,190$21,333$19,473$18,671$18,048$19,753Q2-Q1/Accrual

CASH BASIS

Accrual Basis

Measuring the increase!

• $26,190 - $21,333 = + $4,857.00

• $4,857.00 / .02 (tax rate) = $242,850 of NEW taxable lodging sales in Custer County

• This increase does not correlate to reports from local vendors; therefore it is likely NEW COMPLIANCE.

2014 Budget

2014 Budget

Custer County Strengths

• 740 Miles of Wow!• Community Foundation• Events• Volunteers• Master Plan• Main Street• Club America / Cliff Lanes• Bluff/Theater/Arts/Recreation

Custer County Weaknesses:• Seasonal Sales• Over Marketing Summer• Lack of Events year round• Over reliance on Tourism• Volunteers• Property Taxes

– Gallagher Amendment 1988– 3rd-4th Highest in the Nation– 3.64 x the Residential Rate / $1,000

Threats!

• Environmental:– Wildfire– Drought– Wind– Insects

• Economic/Government– Taxes, Operating Costs, Legislation, Mandates

• Values– Growth, Political, Social/Economic

Marketing Mix

• Is it 90 miles / 90 minutes?• Is it events?• Is it neighboring States?

– Different Target Audiences!– Defining a target audience and a

marketing mix is essential.– Must have buying power!

• Colorado remained the top provider of vacationers: – 40% of overnight leisure travelers– 2010-2011 (41%)

• The top out-of-state markets for overnight Colorado vacations continued

• to be California and Texas, followed by: – Arizona – Florida – Utah – New Mexico – Illinois – Kansas – New York– Nebraska

2012 LongwoodsMay 2013

Geographic Origin Custer County

Who knows?!!! Courtesy of the Westcliffe Inn:Colorado remained the top provider of vacationers: – 43% of overnight traveler’s (not known if Leisure) in 2012– 45% of overnight traveler’s (not known if Leisure) in 2013

• The top out-of-state markets for overnight Colorado vacations continued

• to be Texas and Kansas, followed by: – Oklahoma– New Mexico– Missouri (California 2012’)– California (Missouri 2013’)– Ohio– Arizona– Iowa– Illinois– Nebraska