By Anthony Hennen | The Center Square
(The Center Square) – To spur economic growth, some Pennsylvania legislators are considering allowing counties to create tourism improvement districts to fund marketing efforts to attract visitors.
The Senate Community, Economic, and Recreational Development Committee met Monday to hear testimony on how TIDs can benefit the tourism industry.
Committee Chairman Senator John Yudichak, I-Nanticoke, said the concept has been embraced as a tool for economic recovery after the pandemic.
“When visitors travel to Pennsylvania, everyone wins,” Yudichak said.
TIDs are a relatively new policy approach that levy a fee on hotels to collect revenue for a tourism promotion board. California created the model in 1989, and the idea has spread to Nevada, Massachusetts, Virginia, and Louisiana, among other states.
Generally, a majority of businesses who would be affected by the additional fees must petition or approve the creation of a TID.
“The legislation we would ultimately like the General Assembly to consider would enable — not mandate — TIDs in Pennsylvania,” said Joe Massaro, president and CEO of the Pennsylvania Restaurant & Lodging Association
“We see it as a solution to generate tourism promotions or to create new local attractions based on regional needs while allowing lodging businesses, who must justify an additional levy on their customers, decision-making ability,” Massaro said. “TIDs help generate regional tourism demand.”
Massaro cited an analysis that argued hotel room demand increased by 2.1% in areas with a TID as opposed to those without one and a 4.5% boost in hotel revenues.
However, he also noted fees that run too high can hurt tourism.
“The hotels are the ones that take the risk,” Massaro said. “Levying a fee on their customers comes with a bit of competitive risk if a neighboring county or region does not do so. So, the hotel community has to make sure that the investment made with that money is one that increases occupancy.”
Sen. Wayne Fontana, D-Pittsburgh, noted the importance of state oversight with TIDs, rather than counties setting the boundaries.
“My concern is if it goes into the counties and there’s no real, more guidelines from the state, it’s hard to imagine what they’ll do,” Fontana said. “It’s a fee increase to your customers; it’s concerning to me what the county will do.”
The concern is a familiar one. In September, Fontana called for an audit of VisitPittsburgh.
“An independent audit of VisitPittsburgh’s use of the county Hotel Room Rental Tax would provide the public assurance that the millions of dollars provided to this private organization each year are being used as intended,” Sen. Fontana said. “Further, it would help to demonstrate the effectiveness of the programs administered by VisitPittsburgh to the county and city economies relative to tourism promotion.”
He repeated those concerns about the potential creation of statewide TIDs, arguing oversight is necessary to ensure the money is spent in a way that is as “effective and efficient as it could be.”
“If we’re gonna create another fund — which I’m fine with because promotion’s a big deal — I would want everyone working together. And that seems to be a resistance to do that for some reason,” Fontana said.