This document summarizes a webinar about Tourism Improvement Districts (TIDs). It discusses the growth of TIDs as a funding mechanism for Destination Marketing Organizations. Data from a survey of 88 TIDs nationwide is presented on topics like district formation processes, assessment rates, fund oversight, and the effects of increased promotion funding. Key findings include that over half of TIDs formed in the last 5 years, most assess hotels based on a percentage of revenue, and on average TIDs increased total tourism funding by $1.6 million.

1. DMAI Webinar Series:
THE GROWING LANDSCAPE OF TOURISM IMPROVEMENT DISTRICTS
November 19, 2014

2. Presenters
■© DMAI
Michael Gehrisch
President & CEO
DMAI
John Lambeth
President
Civitas Advisors
Carl Ribaudo
President
Strategic Marketing Group

3. Agenda
Introduction & Executive Summary
•Michael Gehrisch
TIDOverview
•John Lambeth
Methodology & Profile of Respondents
•John Lambeth
District Formation Process
•John Lambeth
Assessment Rates & Fund Oversight
•John Lambeth
Results of Increased Promotion
•Carl Ribaudo
Metrics Utilization
•Carl Ribaudo
Strategic Implications
•Carl Ribaudo
Questions & Answers
•Michael Gehrisch

5. DestinationNEXT
 Evaluating & Evolving the DMO
Business Model
 Changing Tourism Ecosystem
 Governments temptation to use
tourism taxation non related
tourism use
 12% of DMO leaders expect
change in business model in
the next 5 years

6. Tourism Improvement Districts
 One of the fastest growing
funding mechanisms for DMOs
 124 destinations in 9 states
now receive funding through a
TID
 Provide a stable funding
source for tourism promotion
 Governed by those who pay
the assessment

7. Why Is This Important?
STR projecting 1.14 billion rooms sold in 2014
Average tax on hotel room is 12.6%, of which 10.4% is
hotel tax
 All-time record $17.9 billion hotel tax receipts collected,
with $3.0 billion going to DMOs
 79% of DMAI members receive 75% of their revenue
through occupancy tax

9. TID Structure
Hotels pay an assessment…
Collected by the local government…
And managed by the DMO.

10. Characteristics of TIDs
Structure
• Usually citywide, multiple cities or countywide

11. The TID Revolution
Started in
West
Hollywood,
1989
Slow initial
growth
Rapid
expansion in
last decade
Districts Now
•85 California
•17 Montana
•11 Washington
•5 South Dakota
•1 Oregon
•1 Texas
•1 New Jersey
•1 Kansas
•1 Louisiana
•1 Scotland
Considering
• Pennsylvania
•Oklahoma
•Wisconsin
•Florida
• Tennessee

13. Methodology
Who • Executive Directors, Presidents/CEOs,
or other senior level TID executives
What
• Questions related to the formation
process, funding levels before and
after formation, challenges, and
measureable effects
When •May ‐ June 2014
Where • TIDs in nine US states participated
Why • To have the first look at TIDs with a
national perspective

14. Profile of Respondents
At the time the survey was conducted, there were 123 TIDs in 9 states. 88
TIDs, accounting for 70% of the existing TIDs nationwide, responded to the
survey.

15. A Rose by Any Other Name
TIDs go by many names, but all have similar structures and goals. Respondents were asked
to provide the type of their district. Over 60% of responding districts are Tourism Business
Improvement Districts (TBIDs).
TBID
60.2%
TID
12.5%
TMD
7%
HBID
2%
BIA
4%
TPA
7%
Other
7%

16. District Capacity
We asked respondents to provide the number of rooms available in their districts. Over
50% of TIDs surveyed have 1,000‐5,000 hotel rooms available.
14%
6%
13%
55%
2%
8%
60%
50%
40%
30%
20%
10%
0%
<100 100-500 500-1,000 1,000-5,000 5,000-10,000 10000+

17. District Makeup
We asked respondents about the boundaries of their district. Almost two‐thirds of TIDs
only encompass a single city.
One city
64%
County and
multiple cities
14%
Multiple cities
One county
8%
13%
Multiple
counties and
cities
1%

19. District Formation by Year
The number of TIDs forming each year continues to increase. Over 75% of respondents
formed their district in the last 10 years and close to 50% formed their district in the last 5
years.
4
16
24
42
45
40
35
30
25
20
15
10
5
0
Pre-2000 2000-2004 2005-2009 2010-Present

20. Reason for District Formation
Loss of
City/Count
y Funding,
11%
Insufficient
existing
funding/Require
base funding, 61%
Secure funding
from maximum
rate chargeable to
guests, 3%
Competitive
destination(s)
increasing their
budget, 10%
Other, 14%

21. Who was the Primary Organizer During District Formation?
Lodging Industry,
36.8%
Chamber of
Commerce, 19.5%
City or County, 6.9%
Local DMO, 36.8%

22. How Long Did it Take to Form Your District?
Less than 6
months, 16%
6 - 12 months,
57%
13 - 18 months,
16%
More than 18
months,
11%

23. Ease of Formation
We asked respondents to gauge the ease of forming their TID.
5%
26%
39%
26%
5%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Very easy Easy Neutral Difficult Very difficult

24. Challenges in District Formation
Over half of respondents indicated that educating the local lodging industry was the most
difficult challenge in forming their TID. The majority of “Other” responses indicated there
were no major challenges.
21%
3%
54%
5%
17%
60%
50%
40%
30%
20%
10%
0%
Overcoming political
issues
Overcoming legal
issues
Educating local
lodging industry
Developing and
reaching agreement on
a plan to use funding
Other

26. Prior Funding
Respondents were asked to indicate the amount of tourism marketing funds that were
available before TID formation. Over a quarter of respondents indicated that there was no
tourism marketing funding before the TID.
$0,
26%
< $250,000,
< $500,000, 20%
19%
< $1,000,000,
4%
< $750,000,
9%
< 5,000,000,
13%
> 5,000,000,
5%

27. Assessment Basis
Respondents were asked to indicate the basis by which the assessment is calculated. The vast
majority of TID assessments are based on either a percentage of lodging revenue or a specific
dollar amount per night per occupied room. “Other” methods included flat fees and
percentages not based on lodging revenues.
50%
44%
6%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Percentage of lodging revenue A specific dollar amount per night
per occupied room
Other

28. Assessment Amount
Respondents were asked to provide the amount of their assessment. This information is split
into two graphs illustrating assessments based on a percentage of lodging revenue and
assessments based on a fixed dollar amount.
7
17
9
60%
50%
40%
30%
20%
10%
0%
1% 2% 3%
14
16
2
60%
50%
40%
30%
20%
10%
0%
$1.00 $2.00 $3.00

29. Assessment Rate Variance
Most TIDs charge the same assessment rate to all lodging businesses within the district. Some
TIDs however, charge different assessment rates based on several factors. Respondents
indicated that the most common factor for variable assessment rates is room count.
9
8
16
3
18
1
Average Daily
Rate
Geographic zone Room Count Limited vs. full
service
No variance Other

30. Threshold to Determine Hotels Subject to Assessment
Respondents were asked to indicate whether or not a threshold exists to determine which
lodging business pay the TID assessment. The majority of TIDs do not have any threshold,
however, a threshold for room count is much more likely than one for revenue.
Room count threshold
No
65%
Yes
35%
Revenue threshold
No
95%
Yes
5%

31. Assessment Rate Increases
A majority of respondents indicated that they have not increased the assessment rate set forth
in the original TID formation. Approximately one‐third of TIDs have increased the assessment
rate, with the most common increase being either 1% or $1.
Have you increased
the assessment rate
set in the original
formation of your
TID?
Yes
31%
No
69%
How much has your assessment rate increased?
1
7
2
1 1
2
1
5
2
3
30%
25%
20%
15%
10%
5%
0%
0.50% 1% 1.50% 2% $0.25 $0.50 $0.75 $1 $1.25 Other

32. Fund Management
Over half of respondents indicated that a Destination Marketing Organization (DMO) manages
TID funds.
52%
15%
7%
14%
5%
8%
60%
50%
40%
30%
20%
10%
0%
DMO Chamber of
Commerce
Local
government
Advisory board Lodging
corporation
Other

33. Managing Body Advisory Board Representation
Nearly all respondents indicated that hotels were represented on the TID’s managing body.
99%
41%
31%
43%
21%
12%
120%
100%
80%
60%
40%
20%
0%
Hotels Local government Chamber of Commerce
Other tourism businesses Non-tourism businesses Other

34. Difficulty of District Management
Respondents were asked to indicate the degree of difficulty in district management ranging
from “Very Challenging” to “Not at All Challenging”.
6%
17% 17%
14% 15%
24%
6%
30%
25%
20%
15%
10%
5%
0%
1 2 3 4 5 6 7
Very Challenging Not at All Challenging

35. Challenging Aspects of District Management
Three‐fourths of respondents indicated that ongoing education of lodging industry members
and local government officials has been the most challenging aspect of TID management.
76%
22%
29% 32%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ongoing education of lodging
industry members and local
city/county municipality.
Dealing with lodging
members or others who
opposed the formation of the
district.
Providing specific track able
results for district funding.
Developing a common vision
for how funding should be
used.

41. TID Satisfaction Rates
Respondents were asked how satisfied they were with their current TID. Almost two‐thirds
indicated they were “Very Satisfied”.
Very
satisfied
61%
Satisfied
28%
Neutral
7%
Unsatisfied
Very 3%
Unsatisfied
1%
“We have received two national
titles as a result of the work
that was done by the TBID…we
have received Rand McNally’s
Best of the Road title for Best
for Geocaching…we are also
one of 19 national ride centers,
as designated by the
International Mountain Biking
Associating. [This] would not
have been possible without the
TBID.”

42. Increased Tourism Funding
Respondents were asked how much the amount of total tourism funding increased as a result
of formation. On average respondents reported an increase of roughly $1.6 million.
12
19
24
13
12
5
35%
30%
25%
20%
15%
10%
5%
0%
100K $500K $1M $2M $5M $5M +

43. Increased Tourism Promotion Efforts
Respondents were asked how TID funds have impacted tourism promotion efforts.
How have tourism district
funds impacted your
destination's tourism
promotion efforts?
94%
Maintained
Efforts
6%
Since your tourism district's
formation, have tourism
promotion efforts increased:
Both
55%
Neither
Increased Efforts 43%
1%
2%
Domestically
Internationally

44. Increased Tourism Funding
Respondents were asked what areas of tourism promotion have increased since TID formation.
A majority of respondents indicated increases in seven of the ten listed options for tourism
promotion.
77
61
26
59
66
54
73
17
62
13

45. Improved Destination Competitiveness
Respondents were asked how they felt the addition of TID funds has affected their destination.
97%
0% 1% 2%
120%
100%
80%
60%
40%
20%
0%
More competitive Less competitive About the same Unsure

47. Snapshot
“We have
shown over
100% increase
in weekend
stays.”
“Increased
generated room
nights by 550%
since 2008.”
“45% increase in
hotel stays
between 2010
and 2013.”
“Overall results
of initial 5 year
district (during
Recession) was
approximately
20:1.”

48. Return on Investment Analysis
Respondents were asked if they conducted a specific economic analysis on what additional
funds could produce in Return on Investment (ROI).
Yes
82%
No
18%

49. Effectiveness of TID Funds
Respondents were asked if they have a program to specifically measure ROI of TID beyond
traditional metrics.
No
52%
Yes
48%
“More than an 800% ROI on TBID
funds to gross revenue generated
by increased room night sales.
Group bookings went from 10k a
year to nearly 60k”

50. Overall Performance Metrics
Respondents were asked which of the following metrics they used to track the performance of
their TID.
Measurement for
Targeted
Programs 28%
Google/
Website Analytics
27%
Average Daily
Rate 17%
Occupancy Rate
29%
Rev PAR 22%
Room Nights
Generated
40%
Social Media
Measurement
21%
Other
7%

52. Developing a Marketing Plan
Respondents were asked whether they created a specific Marketing Plan with input from the
lodging industry and/or other stakeholders.
Yes
82%
No
18%

53. Visitor Segmentation and Focus
Respondents were asked to indicate the type of visitors they focus on attracting to their
destination with the TID funds.
73
51
30 33
6
Leisure (FIT
Traveler)
Group Business Individual Other

54. Staff Positions Funded
Two‐thirds of respondents indicated that their TID funds between 1 and 5 staff positions.
11%
66%
14%
8%
70%
60%
50%
40%
30%
20%
10%
0%
0 1 to 5 6 to 10 10+

55. Executive Director Compensation
Respondents were asked to indicate the amount of compensation for their TID’s Executive
Director. Nearly half of respondents reported salaries ranging between $75,000 and $149,999.
15%
18%
24%
20%
10%
14%
30%
25%
20%
15%
10%
5%
0%
Less than
$50,000
$50,000 -
$74,999
$75,000 -
$99,999
$100,000 -
$149,999
$150,000 -
$199,999
$200,000 or
more

56. Program Reductions
Respondents were asked, “If
your TID dissolved and your
funding was eliminated, which
program areas would be
reduced?” Over half of those
who indicated “Other” reported
that their entire program would
be terminated upon dissolution
of the TID.
73%
67%
83%
68%
78%
40%
71%
33%
78%
18%
Other
Staffing
Welcome centers
Social media
Destination collateral
Traditional media (print, radio, TV)
Special events (marketing funds)
Special events (operating funds)
Group sales
Web development/upgrades

57. Questions & Answers
John Lambeth,
President
Civitas
www.civitasadvisors.com
(800)999-7781
Carl Ribaudo,
President
Strategic Marketing
Group
www.smgonline.net
(530)541-2462
Michael Gehrisch,
President & CEO
Destination Marketing
Association
International
www.destinationmarketing.org
(202)835-4219