Lodgings in Sonoma on the rise

Hotel occupancy at 72 percent, says tourism report; Councilmember Harrington wants more details|

Overnight tourism in Sonoma is on the uptick.

That was the message Monday when officials from the city Tourism Improvement District presented to the Sonoma City Council their annual report on the state of “heads in beds” at city hotels.

According to TID spokesperson Bill Blum, overnight lodging rates have increased by 12.5 percent since the district was established five years ago – and revenues from TID fees are up more than 14 percent since the first year of full year of collections in 2013-14.

Blum, a district board member as well as manager of MacArthur Place Inn and Spa, presented the report at the Aug. 21 council meeting as part of the TID’s annual end-of-fiscal-year update to city officials, as agreed upon as part of the district’s 10-year term with the city, which began with the council’s renewal of the district in 2014.

Founded by the City of Sonoma in 2012, the Tourism Improvement District assesses a 2 percent surcharge on all overnight stays at hotels and other places of lodging within the city limits, with revenues going mostly toward further marketing of Sonoma as an “overnight destination,” according to the website of the Sonoma Valley Visitors Bureau, which administers the TID funds used for the tourism marketing campaigns.

According to the report, one of the TID’s primary goals is “increasing occupancy and room revenues at lodging properties” within the city, with an emphasis on the winter down season from November through April. In 2016-17, the occupancy rate was 72 percent overall; and 61 percent during the off season.

Compared to last year, total occupancy was down about 2 percent – and nearly 5 percent from November through April – possibly due, said Blum, to the uncharacteristically wet weather putting a damper on tourism.

In the 2016-17 fiscal year, the TID’s total income was $716,495. Seventy-four percent of that revenue went toward advertising and marketing, with 13 percent going to visitor services, 7 percent toward grants for special events which draw tourism – such as the Sonoma International Film Festival and the Valley of the Moon Vintage Festival – along with 3 percent for research and reports and 1 percent toward city fees.

Only 2 percent, or $13,300, was used for operations, as the district isn’t staffed, rather run by a seven-member volunteer board of directors comprised of representatives from six Sonoma hotels along with City Manager Cathy Capriola.

As a point of comparison, the city’s Transient Occupancy Tax – a 10 percent surcharge assessed to hotel patrons which goes directly to city coffers – last year brought in $3.73 million.

During the public comment portion of the meeting, resident David Eichar presented overhead visuals to the council showing the improvement in Sonoma tourism since the recession largely coincides with improvements to the overall U.S. economy.

“Are the funds for advertising really doing anything, or is it the economy,” asked Eichar.

The City Council unanimously accepted the report, but not without a few questions. Mayor Rachel Hundley was concerned about the TID’s lack of a reserve fund, despite one being mandated under its terms of agreement with the city.

More skeptical was Councilmember Amy Harrington. In a meeting earlier this month, Harrington had lobbied the council to agendize a deeper review of the city’s contract with the Sonoma Valley Visitors Bureau – specifically whether it made fiscal sense for the city to continue to provide $100,000 annually to the bureau, as it has done since the dissolution of redevelopment agencies in 2012, since in that same time the bureau has enjoyed TID revenues of more than $650,000 annually.

Harrington stressed that her concerns aren’t a criticism of the Visitors Bureau, but it was her responsibility to ask the question.

“Since the hotels are doing so well, could the hotels be contributing more to their own advertising?” asked Harrington. “Given that the TID is so much higher than anticipated.”

Harrington suggested that it would be more logical to have the annual TID report coincide with a review of the city’s contract with the Visitors Bureau, since the finances of both entities are somewhat intertwined.

“Having a (TID) budget from the Visitors Bureau’s side is fair to the people presenting it,” commented Harrington, adding that she’d like to see more detail in the report, such as Visitors Bureau salaries and alternative ways the TID funds could be spent beside advertising.

Not all the council members wanted to dig beneath the TID surface as much as Harrington.

Councilmember Madolyn Agrimonti, for instance, was sold on the TID.

“The last speaker said if the whole world is successful, then Sonoma should be successful,” said Agrimonti, referencing Eichar’s comments about the overall economy. “I don’t think that way.

“We are successful in Sonoma because the TID pays for the advertisements,” she said.

Councilmember Gary Edwards minced few words in his support for the tourism district.

“The sound to me is we’re going to slap the hand of the group (that feeds tourism),” said Edwards. “Seventy-five percent occupancy? I’d like to see 85 percent occupancy.”

Added Edwards with more than hint of sarcasm: “Shame on you guys for bringing $3.7 million to the City of Sonoma.”

Email Jason at jason.walsh@sonomanews.com.

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