For Natchez, every hotel room key is money in the bank
Published 12:22 am Sunday, April 11, 2010
For nearly two years, tourists have primarily bankrolled the Natchez Convention and Visitors Bureau’s annual marketing budget, and all transactions begin and end at the hotel check-in counter.
Local voters in June 2008 backed a $2 hotel occupancy tax, at first believed to increase the marketing budget from approximately $120,000 per year to $600,000. Original estimates were later tweaked to reflect a $474,000 annual budget.
However, since the tax was created in July 2008, $419,097.18 has been collected.
So far this fiscal year, which began in October, the tax has brought in $120,518.67, Tourism Director Connie Taunton said. The projected 2009-2010 budget is $375,500 — a hopeful amount considering the recession, Taunton believes.
“We’re closely watching the tax returns,” Taunton said. “We’re not counting on the collection to reach $375,000. We’re hoping for $300,000.”
The majority of the budget — $192,000 — is devoted to leisure tourism, which includes advertisements in publications such as Southern Living, the production of Natchez Visitors Guide and Web site research and updates.
Taunton said $121,000 is devoted to conventions and meetings, and $62,500 is devoted to heritage tourism emphasizing multicultural attractions.
Taunton estimates 80 percent of the budget is spent within a 150-250 mile radius. Target areas include Jackson and the Louisiana cities of Baton Rouge, New Orleans, Monroe, Lafayette, Alexandria and Shreveport. The remaining 20 percent is spent in markets outside the 250-mile radius, specifically Houston, Dallas and smaller Texas cities such as Temple, Longview and Tyler.
Though Natchez is a draw for international tourists, the CVB does not emphasize international marketing.
“When you market a city like Natchez, you have to ask what demographic is coming here and where the demographic is coming from. That’s how you make decisions on where to spend advertising dollars,” said former tourism director and current Natchez Convention Center general manager Walter Tipton.
“Our demographic is from Mississippi, Louisiana and Texas, so we saturate our base markets. “You don’t want to spend all your money in Alaska or Germany.”
The success of advertising campaigns rely on hotel and bed and breakfast establishments reporting its tax collections to the Mississippi Tax Commission, which cuts a check to the CVB monthly. Tax collections are reported two months after the fact, meaning this month’s check will reflect February collections.
Taunton said hotels should report its collections to the tax commission monthly, while bed and breakfasts should report quarterly. But not all hotels and bed and breakfasts are adhering the schedule.
“There are some properties that are delinquent,” Taunton said.
A Mississippi Tax Commission official declined to identify which hotels and bed and breakfasts are delinquent, citing taxpayer confidentiality.
Taunton said projecting monthly tax collections is nearly impossible. The CVB sometimes receives a sizeable check if hotels catch up on its tax reports. Groups that are exempt from the tax also alter projections.
The CVB receives its most sizable checks in May and June, reflecting March and April collections. The increase is attributed to Spring Pilgrimage, which concluded Saturday.
Last year, the CVB collected $36,688.31 in March and $23,548.69 in April. The Mississippi Tax Commission usually remits checks to the CVB mid-month.
Though official figures are not yet available, Tipton said occupancy rates at Natchez Grand Hotel, owned by New Orleans Hotel Consultants, have exceeded expectations.
“This past March was the highest revenue we’ve had since opening up the hotel,” Tipton said.
Taunton is optimistic Spring Pilgrimage will post good numbers this year, and despite projections falling short of expectations, she ensures voters they made the right decision.
“I think we’re going to see some encouraging Pilgrimage numbers,” Taunton said. “Because of the recession, we’d be in worse shape if we didn’t have the tax. I think Natchez has great things ahead for it.”