Missoula’s Tourism Business Improvement District is expanding in 2020 to include the entire city.
In an 8-0 vote with one abstention and three absent, the City Council approved the renewal of the TBID for a second 10-year period and its citywide expansion, saying the district provides an important economic boost.
"What was really encouraging to see is the TBID, after 10 years, has proven that it pays for itself," said Councilor Heather Harp. "That's a remarkable accomplishment."
Only one small hotel establishment protested the expansion at Monday night's public hearing, saying the TBID caters only to larger hotels.
But TBID supporters countered that with its efforts to woo more travelers to Missoula, either by working with airlines, marketing at conferences, or providing grants to event organizers, the TBID benefits everyone, even if only with a ripple effect.
Barbara Neilan, the district's executive director, said it was a concern when the TBID formed initially in 2010 that it would only benefit the larger hotels. But during the course of the past nine years, she said they found the opposite to be true.
"People are so used to fees being added on to hotels it seems they don't notice it because the fee is so small, especially compared to other states," Neilan said, adding that when larger hotels are full, there's a "cascading" affect that fills the smaller venues. "Large hotels have large marketing budgets ... that smaller hotels don't have. It's hard for them to get their name out. That's one of the reasons we exist — to be that marketing arm for them."
By law, the TBID must be renewed every 10 years. Its intent is to get more heads in hotel and motel beds by collecting a $2-per-night fee on occupied rooms from those facilities.
The money is then used by Destination Missoula and the district to promote Missoula in a variety of ways, including marketing the Garden City at convention and trade shows, to the travel industry generally, and to sporting event organizers.
Under the previous configuration, not all of Missoula’s hotels participated in the TBID. Now, it will involve all of Missoula’s hotels and motels that have more than seven units that charge by the night. Weekly and long-term units aren’t included.
The TBID initially had 10 hotels and motels participating, and that has increased to 20 now. Under the resolution approved Monday night, 12 or 13 will be added to the district. Last year the TBID’s annual budget was about $893,000, and it's estimated the expansion will add $390,000 to that.
The marketing brought new events to Missoula, including the 2016 USA Gymnastics Women’s Junior Olympic western championships and the 2017 and 2018 USAC Collegiate Mountain Bike Championships.
The funding also provides support to existing events, including the Big Sky Documentary Film Festival, Special Olympics Montana and Missoula Youth Hockey. In addition, they’ve established a funding mechanism that brought more flights and airline carriers to Missoula, including Frontier and American Airlines.
Neilan noted that in 2019, the hotels and motels averaged 63.5% occupancy, with an average daily rate of about $106. She said Bozeman is the only city in Montana that exceeds Missoula in those categories, but argued that was mainly due to leasing hotel and motel rooms to construction crews in Bozeman and Big Sky.
A petition was signed by property owners representing 65% of the area of the properties proposed to be assessed in the district. That's 5% over the necessary threshold to renew and expand the district to cover all of Missoula’s hotels and motels with the city’s boundaries.
City Clerk Marty Rehbein sent notices to all of the affected hotel and motel owners. They had until 5 p.m. Monday to file written protests, and only one was returned.
Councilor Mirtha Becerra abstained from the vote since her company is a beneficiary of a TBID grant. Councilors Jesse Ramos, Julie Armstrong and Michelle Cares were absent.