San Francisco Hotels Looking at Adding a 1.5% Assessment on Room Sales in January 1, 2009

San Francisco's tourism industry is looking at creating a Tourism Improvement District that will add 1.5% to the current 14% room tax, to go with guaranteed City funds, for the Moscone Convention Center repairs, improvements and expansion as well as fund the convention and visitor's bureau that markets the City as a convention and visitor destination.

Here is some more information from a recent bulletin I received:

Travel and tourism is San Francisco’s largest industry, generating nearly $8 billion in annual economic impact. With San Francisco city government’s general budget challenges and priorities, the City’s tourism industry has not received adequate and consistently reliable financial resources to stay competitive. In a proactive and unified effort, the San Francisco tourism community formed a Tourism Task Force to develop a Tourism Improvement District.

The Task Force, including a diverse membership of hoteliers and tourism business practitioners, met for a year to discuss solutions to ensure San Francisco’s competitive position in international tourism, while maintaining tourism and hospitality as the City’s number one industry. The proposed San Francisco Tourism Improvement District is the recommended solution.

The Task Force elected to use a strategy employed by other cities in the state and most recently, San Diego. This strategy recommends an “assessment district” model, which would be used to assess benefiting businesses and create a sustainable funding mechanism. In March, the SFCVB hired New City America to serve as its primary consultant in this effort. This was based on their experience informing seven (7) business improvement districts within the City.

There would be three primary sources:

Phase 1 – Hotel Participation: SFTID assessment on all occupied non-residential hotel rooms in the city.

Phase 2 – SFO and tourism-related business participation: Assessment on businesses that generate over $1 million annually in tourism-related business, based in San Francisco.

Redirect City’s current SFCVB allocation to Moscone for physical building upgrades and expansion.