Huntington Beach is looking to expand its tourism advertising as cities across the county consider what the future of their tourism offices should be in the wake of the state auditor’s investigation into Anaheim’s tourism advertising agency.
Orange County Tourism is funded not by the city’s general fund but by a special voluntary tax levied by hoteliers on hotel rooms and short-term rentals paid by out-of-town visitors.
These taxes are collected by the city and then passed on to the tourism board. Tourism bureaus are typically nonprofit organizations separate from city governments and receive little oversight.
The theory is that that money could be used to promote the city in other states and countries, generating additional revenue for both hoteliers and the city through hotel tax revenue.
Currently, many of Surf City’s hoteliers are calling for a 2% increase in the special tax levied on them in order to spend more money on promoting the city, which would make the city’s total hotel tax will be 16% per room.
Just over a third of the 16 percent of this expansion, or about $10 million, will go toward funding Visit Huntington Beach, with the rest going straight to the city’s coffers.
“We attract millions of visitors, generate approximately $500 million in direct economic impact annually, and support more than 4,000 jobs,” said Kelly, CEO of VisitHB.・Mr. Miller stated this at the City Council meeting on April 16th. “A decrease in visitors to Huntington Beach will definitely reduce (hotel) tax revenue, sales tax and parking revenue.”
Approximately 75% of the $10 million will be spent on advertising and local tourism programs, with an additional 20% on salaries for Visit HB staff.
Those bureaus have come under increased scrutiny over the past year amid questions surrounding Visit Anaheim, one of the county’s largest and most well-funded tourism bureaus, which is responsible for promotional facilities such as Disneyland, the Honda Center and the Anaheim Convention Center. are collecting.
A state audit found that Visit Anaheim improperly transferred some of the tax money it earned to the Anaheim Chamber of Commerce and spent the money lobbying elected leaders.
State auditors also said Anaheim officials had to send $6.5 million in relief money to the tourism bureau in early 2020 when the pandemic first began, because Visit Anaheim already had $6 million in reserves. I wondered if it was true.
Representatives of Visit Anaheim, through a law firm, pushed back on claims that it had millions of dollars in reserves.
[Read: CA Auditors Lambast Anaheim’s Tourism Bureau, Find Improper Tax Dollar Spending]
Visiting Huntington Beach has also gained increased attention over the past year due to controversy surrounding the Pacific Air Show, one of the city’s largest annual events.
Kevin Elliott, CEO of Code Four, which organizes the air show, is a member of VisitHB’s board of directors, and the agency estimates the show generates as much as $120 million in direct spending annually. They have repeatedly produced reports that make their claims.
However, it remains unclear how accurate these reports are, and even the report’s authors admit that they do not know the exact details of how they arrived at their numbers.
[Read: How Much Money Does the Pacific Airshow Bring to Huntington Beach?]
Discussions also continue among other city officials about how to manage tourism advertising in the future.
In Newport Beach, hoteliers are talking about leaving the city entirely and running their own marketing operations as an independent nonprofit organization without any tax dollars.
[Read: Newport Beach City Leaders Question Tourism Advertising Spending]
In Anaheim, Visit Anaheim just named a new CEO and city leaders are struggling to decide what kind of relationship they will have with Visit Anaheim going forward. . That includes discussions about using a portion of the self-imposed hotel tax to fund affordable housing.
Noah Biesiada is a reporter for Voice of OC and a member of Report for America, an initiative of GroundTruth. Contact us at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
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