Lodging tax surplus gives Aspen Chamber Resort Association a boost
The Aspen Chamber Resort Association is building a reserve fund for its destination-marketing budget in the event of a recession or unforeseen costs, and it’s getting a significant bump because of more than $216,000 in unanticipated funds generated last year from the city’s lodging tax.
The city’s 1.5 percent lodging tax earmarked for tourist promotion and marketing efforts reeled in $2.63 million in 2016. That was $216,514 more than the $2.41 million the city budgeted last year, leaving ACRA with the extra funds.
Aspen voters approved the increase of the lodging tax from 1 percent to 2 percent in 2010. Three-fourths of the tax proceeds are committed to marketing Aspen; the remaining fourth goes to the city’s transportation department, which reaped $878,776 in 2016, according to city finance records.
The 2 percent tax is paid each time a guest stays at an Aspen lodge.
The city has hired ACRA each year since the tax’s inception to use the money for tourist promotion efforts. During last fall’s budget discussions, the City Council retained ACRA to market Aspen in 2017.
At a Tuesday work session, the City Council blessed ACRA’s supplemental budget request to add $120,000 of the surplus taxes to the existing $200,000 in the destination-marketing reserve fund, with the goal to eventually have $500,000 in that account, said Julia Theisen, ACRA’s vice president of sales and marketing.
With the fund now at $320,000, ACRA plans to hit the half-million-dollar mark by putting in $90,000 in both 2018 and 2019.
“We are working to build a reserve fund for destination marketing, really just to be prepared for any economic downturn,” she said.
Another $25,000 of that surplus will shore up the $75,000 the city tapped from ACRA’s destination-marketing fund last year to sponsor the World Cup Finals held earlier this month. ACRA’s Shop Local Campaign — a promotion that touts Aspen businesses in the summer — will be supported by $25,000 of the total.
ACRA also is courting Bravo TV to film the “Top Chef” program during the Food & Wine Classic in Aspen in June.
“We are hoping to get a couple of episodes here,” Theisen said, noting “Top Chef” has scheduled visits in Boulder, Denver and Telluride this summer.
The remaining funds from the surplus include a $10,000 expenditure for upgrades to ACRA’s website and $11,500 for seasonal advertising in markets to be determined.
“I’m perfectly comfortable with these arrangements,” City Manager Steve Barwick said.
Councilman Bert Myrin offered that there may come a time when the funds could be used for purposes other than marketing, such as investing in infrastructure. He suggested that the funds could go toward paying for a new chairlift, to which Mayor Steve Skadron replied: “Those lifts are $10 million to $20 million.”
Still, Myrin said it is something to consider “if the town decides we should invest in product rather than marketing.”
For now, that’s a distant proposition. Changing the purpose of the lodging-tax dollars would require a public vote, Theisen noted.
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