Kalispell City Council considered a new fee on hotel rooms in order to boost the city’s promotional budget at its Monday meeting.
Although no votes are allowed at a work session, council members seemed to largely approve of the proposal to establish a Tourism Business Improvement District (TBID), which was presented by Kalispell Chamber of Commerce President Joe Unterreiner.
Under the proposal, the roughly 16 hotels in Kalispell that wish to participate would assess an additional 2.95 percent tax on total lodging revenues. These funds would be dedicated solely to promoting and marketing Kalispell specifically. Hotel guests in Montana already pay a 7 percent tax, consisting of a 4 percent state tourism tax and a 3 percent state sales tax. The new TBID tax would raise the total lodging tax to just under 10 percent.
Billings, Helena and Missoula have already established such districts since the state Legislature passed a law allowing for their creation in 2007.
Out of the funds raised by the state tourism tax, or “bed tax,” Kalispell currently receives about $70,000 annually. But with the funds raised by the new TBID tax on hotel customers, Kalispell’s hotels could raise an additional $300,000 or more annually for promotion, according to Gib Bissell, the owner of the Aero Inn who spoke in support of the proposal at the meeting.
“There’s a million great things going on in Kalispell that half the people out there don’t even know about,” Bissell said. “Whitefish right now does a much better job of that than Kalispell.”
While Bissell and other hotel executives said they were reluctant to introduce a new tax at a tough economic, they believe the funds could would be well allocated toward setting Kalispell’s events and offerings apart from other destinations in northwest Montana. Bissell added that he sees the TBID as the beginning of a more coordinated effort among cities in the valley to avoid having overlapping festivals and attractions during the peak summer months.
Other hotels in support of the TBID establishment present at the meeting included the Hilton Garden Inn, the Red Lion Hotel and the Blue & White Motel.
In order for the TBID to be created, Kalispell hotels and motels must sign onto a petition calling for such a district, which Unterreiner said is nearly complete. Once the petition is complete, the council would have to adopt the TBID. Then the Kalispell Chamber of Commerce, along with a five-to-seven member board of directors for the TBID will develop a marketing plan and budget, which would also be subject to approval from the city council.
The city of Kalispell would administer the fees, though it’s unclear how the funds could be collected. Unterreiner said the TBID tax could be added to hotels’ tax bills, but City Finance Director Amy Robertson questioned whether that method would be effective in getting the TBID up and running as soon as the end of the year.
The city would also not collect any administration fees from administering the TBID, which City Attorney Charles Harball said would require a minimal amount of time.
The council will vote on whether to adopt the TBID at an upcoming meeting.