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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: February 19, 2008 <br />Action Agen a <br />Item No. -d <br />SUBJECT: Resolution in Support of the Orange County Visitors Bureau Request for 1% <br />Occupancy Tax Increase <br />DEPARTMENT: Economic Development PUBLIC HEARING: (YIN) No <br />ATTACHMENT(S): <br />Proposed Resolution <br />1/7/08 Memo from the Visitors Bureau <br />Board <br />Binder Attachment with Letters of <br />Support for the I% Occupancy Tax <br />Increase (Previously Provided Under <br />Separate Cover) <br />INFORMATION CONTACT: <br />Laurie Paolicelli, (919) 968-2060 <br />PURPOSE: To consider a resolution based on a request from the Chapel Hill/Orange County <br />Visitors Bureau Board that the Orange County Board of Commissioners increase the County's <br />hotel occupancy tax by 1%, from 2% to 3%, as authorized in Senate Bill 622 of the 1991 <br />Session laws (the legislation includes provisions for the Board of Commissioners, by resolution, <br />to levy a room occupancy tax of up to three percent (3%) on the gross receipts derived from the <br />rental of accommodations in the County). <br />BACKGROUND: With a 1% County occupancy tax, the Orange County Board of <br />Commissioners created the Chapel Hill/Orange County Visitors Bureau in 1991. In the 1996/97 <br />fiscal year, at the request of the Visitors Bureau Board and local industry, the tax was increased <br />to 2% where it currently remains. It is the request of the Visitors Bureau board of directors, <br />Orange County hotels, suppliers, stakeholders and industry partners to raise the tax to its full <br />3% to meet the demands of increased competition for tourism and a desire to service the <br />extraordinary interest in Orange County, among travelers, meeting planners and sports event <br />organizers. The additional revenues would equal approximately $250,000 based on past <br />performance, bringing the Bureau's total budget to $900,000. The 1% increase in occupancy <br />tax would result in a 6% total occupancy tax on Orange County guests, which is on par with <br />most North Carolina counties and is not a deterrent where decision making among hotel guest <br />are concerned. <br />Currently, Durham funds a Visitors Bureau at $2.5 million; Raleigh at $4 million; Pinehurst at <br />$1.5 million; and Greensboro at $4 million. The local tourism industry has been thrust into <br />greater competition as the result of 1,000 new hotel rooms in Durham; and 175 new rooms in <br />Chapel Hill. Two new hotels are slated for completion the next three years. Hoteliers have <br />become concerned about dipping occupancy rates. New restaurants, soccer fields, the