Kalispell City Council unanimously voted Monday to approve a new tax on lodging where the proceeds from participating hotels and motels would be dedicated to promoting and marketing the city as a tourist destination.
The vote specifically creates a Kalispell Tourism Business Improvement District (TBID), comprised of 16 participating hotels that will begin charging guests a flat fee of $1.25 per room, per night.
The formation of a TBID has long been a project supported by the Kalispell Chamber of Commerce and other business associations eager to raise funds toward a marketing campaign aimed specifically at benefitting Kalispell by increasing tourism – one of the few leading industries in the Flathead expected to grow in coming years.
“We can’t afford not to do the TBID right now,” Aero Inn owner Gib Bissell said, adding that drawing more conventions to Kalispell would directly increase business for the bigger hotels and create overflow benefits for smaller lodging operations like his own.
Supporters of the TBID said the new fee could generate a marketing budget in the range of hundreds of thousands of dollars per year – dwarfing the roughly $60,000 Kalispell receives in specific marketing dollars through the statewide 7 percent bed tax.
Hilton Garden Inn General Manager Chris Walters served previously on a board in Billings managing the TBID there, and said the slight increase in lodging prices was rarely noticed by guests and more than outweighed by the marketing benefits.
“There’s no fear that any sort of additional fee is going to turn any tourists away,” Walters said. “Quite frankly, the opposite will happen.”
Walters also noted that Kalispell is competing directly for tourist dollars with other Montana cities that have the advantage of a TBID in place already.
“They’re going after the same business that we are,” he added. “If we don’t do this, we’re going to just continue to stay idle.”
Representatives from outside the hospitality industry also touted the benefits from increased tourism visitors, with Terry Kramer of the Flathead Building Association noting that many of his construction clients are those who visited the Flathead on vacation, then decided to stay and build a home.
The only opposition to the TBID at the meeting came from Winnifred Storli of the Blue and White Motel in Kalispell, who questioned whether the same marketing benefits could be achieved by better coordination of efforts between the overlapping business associations in the area. She also wondered whether this new tax would lead to other taxes.
“Are we going to go on to resort taxes?” Storli said. “I don’t think this is the time to spend money; there are too many people out of work.”
But former Kalispell mayor and current downtown Business Improvement District coordinator Pam Carbonari said the TBID would do both: raise funds and improve coordination among different organizations promoting Kalispell.
“It’s my belief that you will see the Business Improvement District, Kalispell Downtown Association, the Chamber of Commerce and hopefully the newly formed Tourism Business Improvement District cooperate and work together,” Carbonari said.
There was little debate by council members on the TBID creation, which has been in the works for 18 months. But Councilman Bob Hafferman pointed out the tax was likely to have little effect on Kalispell residents.
“It will not be a fee upon the citizens of Kalispell; it will be a fee on the clients of the people within the formed district,” Hafferman said. “I know the value of advertising, it’s important to any business.”
The vote for the TBID creation was 7-0, with Councilman Jeff Zauner absent. The council also unanimously approved an ordinance establishing the rules and regulations for the TBID, and appointed a seven-member board of participating hotel operators to run the TBID.
The TBID board members are: Lori Fisher of the Hampton Inn, Bryan Scott of the Outlaw Inn and Chris Walters of the Hilton Garden Inn representing large hotels; David Ginepra of Travelodge and Arlinna Wolfe of the Comfort Inn representing medium-size hotels; and Gib Bissell of the Aero Inn and Janet Clark of the Kalispell Grand Hotel representing small hotels.