A Tourism Improvement District sparks compounding opportunity and growth for a destination.
A Tourism Improvement District (TID) is a stable source of funding for marketing efforts designed to increase occupancy and room rates for lodging. Funds raised through an assessment (not a tax) on lodging stay within a designated geographic area and are used to provide services desired by and directly benefiting the lodging business within the district.
An Allegheny County TID would assist in the generation of much needed marketing funds. There are currently more than 193 TIDs across the United States, but only three active TIDs in Pennsylvania.
It is important to remember - a TID is industry initiated, managed and approved. All the money generated by a TID is 100% re-invested into the district, resulting in faster room revenue growth after formation. And, the promotion of a destination is for the benefit and wellbeing of every person in a community.
The addition of a 2% TID fee on hotel room rates across Allegheny County would generate an estimated $6.5 million in funds.
The aim of the program is to increase hotel occupancies and overall revenue performance. Each additional occupancy point increases the number of occupied rooms in the county by 66,152 rooms per year with a revenue of $7.1 million (based on the average rate for Allegheny County between 2019/2021, $107.00).
The $7.1 million in room revenue provides an additional:
$991,000 in tax revenues
$495,000 in county hotel tax revenues
$495,000 in city and state sales tax revenues
Governance and Accountability
A TID is governed by a TID Board of Directors, consisting of general managers and owners of assessed businesses (hotels).
The proposed Allegheny County TID Board of Directors would have 9 members from the county’s six subdistricts, as determined by the STR Report.
All funds created for the fund must directly benefit the assessed businesses (hotels).
Marketing plan designed, implemented and assessed by designated tourism organization for Allegheny County (VisitPITTSBURGH), with all plans governed by the TID Board of Directors, who also would establish annual performance targets.
Focused outcome: increase number of economic impact of business, sports and leisure events.
Focused outcome: create additional multi-channel marketing in targeted source markets.
Focused outcome: activate enhanced domestic and international campaigns with airport and regional partners.
A five-year sunset clause would be implemented and renewable at the direction of the TID Board of Directors.