Agenda - 03-06-1991 - Laserfiche WebLink

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As discussed in previous reports to the Council, we have looked for an analysis by a non- industry entity of how much municipal revenue might result from the marketing and promotion efforts of a tourism or visitor development agency. We have discussed this issue with Dave Peterson, formerly national director for sports and convention facilities with Laventhol and Horvath, an accounting firm which specialized in hotel and conference -- related feasibility studies; Mark Lomanno, also formerly with Laventhol and Horvath; Michael Dunn of the Greensboro office of Pannell Kerr Forster, an accounting firm which specializes in hotel matters; and Bryan Mihalik, assistant professor of tourism at Georgia State University. None was able to refer us to a report or study of the type we seek. Their key observations included: * A study of local revenue returns on spending for convention and visitor bureaus in other cities may have little meaning for Chapel Hill. (Peterson) * A break -even analysis of the amount of hotel business necessary to recover funding of a convention and visitor bureau is one way to approach this issue. (Peterson) * A study of the type we seek would involve review of tourism related business income before and after establishment of a tourism bureau, and of other factors affecting tourism /visitor business activity. Such a study could be performed by a firm with the specialized data base necessary. (Dunn /Pannell Kerr Forster) * An economic impact multiplier of 2.0 to 2.5 may be reasonable as an indication of the extent to which tourism dollars recirculate in a local economy. (Lomanno) * The economic multiplier for tourism /visitor income is probably 2.0 to 2.1. (Mihalik) In addition, we contacted Robert Gittler of the Planning Department at the University of Illinois at Champaign and received an income multiplier factor of 1.5884 for Orange County as of 1987. This multiplier was calculated from the University's Economic Impact Forecasting System (EIFS), which is used to generate multipliers for each County in the US from data on business types and employment. As previously discussed, we believe a visitor development authority clearly has the potential to recover a Town funding allocation after a start -up period which could be a few years. An 18% increase in hotel /motel room rental income would recover $25,000 annually in Chapel Hill occupancy taxes without considering multiplier effects. Because of sales tax distribution formulas, we believe most of the