2021-2026 PROPOSED TOURISM BUSINESS IMPROVEMENT DISTRICT
Love Catalina - Catalina Island Tourism Authority (aka Chamber of Commerce & Visitors Bureau) is the official tourism marketing agency for Catalina Island. Founded in 1949 the organization was created as a public-private partnership to help grow the region’s tourism economy. The mission, purpose and vision are outlined below.
Mission: To attract visitors and advocate for commerce on Catalina Island
Purpose: To advance the general welfare and prosperity of the Santa Catalina Island area so that its citizens and all areas of its business community shall prosper. All necessary means of promotion shall be provided and particular attention and emphasis shall be given to the economic, civic, commercial, cultural, industrial and educational interests of the area. The corporation is organized exclusively for purposes within the meaning of section 501(c)(6) of the Internal Revenue Code of the United States.
Vision: Avalon and Catalina Island make up a community where tourism promotion and economic vitality are supported by residents, local businesses and civic leaders to
- ensure economic growth
- encourage conservation of precious resources
- be stewards for Catalina’s unique character
- prepare for crisis or change
- establish/maintain ample finances
- be flexible and adaptive
The organization partners in providing sales, marketing and public relations support targeting potential leisure travelers from around the world as well as event, group sales and weddings. In addition to destination sales and marketing, the organization supports workforce development, consumer and group business research, visitor studies and destination stewardship.
Incorporated as the Catalina Island Chamber of Commerce & Visitors Bureau and doing business as Catalina Island Tourism Authority, Love Catalina Island is a registered trademark used in marketing and promotion of the island. The District is sometimes referred to as the Catalina Island Tourism Improvement District and/or CITBID in legal documents.
Background: In 2019, the Board of Directors of the Catalina Island Chamber of Commerce & Visitors Bureau, now Love Catalina - Catalina Island Tourism Authority, adopted a work plan that included investigation of the feasibility of forming a TBID on Catalina Island. TBIDs are common in destinations that depend on tourism and are the primary means of funding tourism promotion in over 100 California destinations, including all of the destinations in our competitive set. CIVITAS was engaged to determine the feasibility and help define the district parameters for Catalina Island. CIVITAS along with a Steering Committee of Catalina Island tourism businesses has completed that analysis, and we are now inviting you to learn about what the TBID might look like and how the funds would be used to help increase demand for overnight visitation and for your business.
Click to view PDF version of presentation.
Please review the FAQs below for more details on the assessment and benefits.
FAQS (FREQUENTLY ASKED QUESTIONS)
What is a Tourism Business Improvement District?
A Tourism Business Improvement District (TBID) is a coalition of tourism businesses that have agreed to organize their efforts in order to increase demand for sales and overnight visitation to a destination, through programs and activities such as marketing of a city for tourism, events and group meetings, enhancement of visitor services, and development of destination assets.
Why does Catalina Island need a TBID?
Tourism and meetings are an important part of our destination’s economy, with visitors contributing more than $166.7 million in 2016. Visitor spending is estimated to have increased by at least 10.3% between 2016 and 2019. In 2019 the City of Avalon received $13,341,713 from visitor generated revenues. But there is room for growth, especially in the next few years as the hospitality industry recovers from the impact of COVID-19. A Catalina Island Tourism Business Improvement District (CITBID) will provide the funding to market our destination in order to compete with other destinations in the post-COVID environment.
By providing a stable source of funding for marketing efforts and destination development, the CITBID will:
- Raise awareness of Catalina Island as a destination and promote visitation to Catalina Island lodging properties and golf cart rental businesses.
- Increase the number of leisure, business and group travelers to the island.
- Increase occupancy levels and room rates for the lodging establishments located within the District and increase sales for golf cart renal businesses.
- Generate revenue for the City and County’s hospitality industry, retail sector, and arts and cultural sectors.
- Generate tax revenue for the city, county and state.
How does the CITBID assessment differ from transient occupancy tax that guests pay?
The CITBID is an assessment, not a tax. Unlike TOT, CITBID funds must be used to provide services that directly benefit the lodging and golf cart businesses located within the District. Funds will be specifically used for marketing the destination and cannot be diverted for government programs. The CITBID will be governed by a governance committee that represents lodging and golf cart businesses in the District, giving control of the CITBID to those who benefit from it. Love Catalina - Catalina Island Tourism Authority will then manage the operations and programs of the CITBID in accordance with a District Plan.
Why does Catalina Island need a Tourism Business Improvement District?
Catalina Island must compete against other destinations that have much larger marketing budgets in order to attract leisure and group travelers. For example, the Visitor Bureaus in Santa Barbara, Huntington Beach and Newport Beach, with which we often compete for business, have budgets that are more than quadruple the size of Love Catalina - Catalina Island Tourism Authority's budget, and the San Diego Tourism Authority has a marketing budget thirty-four times larger than Love Catalina. The CITBID will:
- Help the local hospitality industry recover from the impact of the pandemic by attracting more travelers to Catalina Island
- Provide immediate resources we need to capitalize on pent-up demand for travel during the recovery period following COVID-19
- Increase demand for sales and overnight stays at assessed businesses
- Provide a stable, long-term source of funding to market and sell the destination
How would the CITBID be funded?
The CITBID will be funded through a 1% assessment on certain stays in lodging and $1.00 per golf cart rental within the District boundary. The assessment would be paid by guests at check-out.
How would the money be used?
CITBID funds will be spent on sales, marketing, communications, and destination development projects that directly benefit the assessed businesses. The funds must be spent in accordance with the District Plan, and may include the following programs and activities:
- Public relations / media relations
- Social media
- Digital marketing
- Creation of visual assets (photo and video)
- Trade/travel shows
- Fam tours
- Destination development projects that enhance the visitor experience
A preliminary budget breakdown is shown below.
How much money would the CITBID raise?
An estimated $540,000 in its first full year, effectively growing the amount available for marketing our city as a destination by 45%.
What is the process to form the CITBID?
The CITBID will be created under the Property and Business Improvement District Law of 1994. This law requires a thorough approval process, which begins with a petition to the Council and the development of a management district plan (MDP) which defines the TBID parameters. When the petition threshold has been met, a City Council hearing process is initiated.
How are the petitions weighted?
The petition process is sufficient if signed by business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied.
What is the timeline for formation of the CITBID and expected implementation date of the CITBID?
The goal is to continue the outreach and education process with stakeholders and City staff, begin the petition drive in June 2021, hold the required hearings, and begin collecting assessments as soon as September 1, 2021, or as soon as possible thereafter.
How long would the CITBID be in effect?
The initial term will be for five years.
How would the CITBID be managed?
Love Catalina - Catalina Island Tourism Authority would be called out in the documents as the “Owners Association. Upon successful formation of the TBID, a governance committee composed of representatives from assessed businesses within the District will provide oversight of the TBID funds. The committee will include representatives from hotels, short-term vacation rentals and golf cart rental businesses. Love Catalina - Catalina Island Tourism Authority will manage the operations of the CITBID in accordance with a District Plan.
What responsibilities would the City have for the CITBID?
The City will be responsible for collecting the assessment from each business located in the District. An annual report must also be submitted and approved by City Council each year.
What responsibilities would Love Catalina - Catalina Island Tourism Authority have for the CITBID?
Love Catalina - Catalina Island Tourism Authority will be responsible for the operations of the CITBID, including all marketing and sales efforts. It will establish a CITBID governance committee that will review and approve the CITBID’s annual budget. The committee will be composed of representatives from lodging and golf cart rental businesses within the District.
Why would Love Catalina - Catalina Island Tourism Authority manage the CITBID?
The state statute requires a non-profit corporation to act as the TBIDs Owners Association. Love Catalina - Catalina Island Tourism Authority already has the staff, infrastructure and operations in place, which means a high proportion of CITBID dollars can go directly and immediately toward new marketing and sales efforts rather than toward administrative costs.
There has been no change in visitor counts the last ten years, why should we believe the TBID will spur growth?
Statistics actually indicate there has been growth over the last ten years. Using the period 2009 to 2019 here are some important measures. Annual Visitor Counts in 2009 totaled 746,055. In 2019 we welcomed 1,021,187 island visitors for a growth of 84%. The majority of that growth has been in “off-season” visitation. An additional measure of growth is found in hotel occupancy over the same period. In 2009 annual occupancy was 41.9%, while in 2019 we achieved 64.6%. Growth in visitation has directly driven growth in TOT and therefore the funds available for tourism promotion. Likewise the TBID will do the same.
Why are we being asked to shoulder the funding of the "Chamber"?
You are not. While you have the option of not passing the assessment on to your guests, nearly every participating business in other TBIDs has elected to do so. Because your businesses are the beneficiaries of the tourism promotion efforts, an assessment paid by your guests is a logical and related means of funding increased tourism promotion and in making us a bit more competitive. Over 100 TBID’s have been established in California and include all of our competing destinations, who are now outspending us using those funds, by larger and larger amounts each year.
Can my business segment be exempted?
TBIDs create a level playing field so that all businesses in a particular segment are included in the district. If all segments get exempted, there will be no fees generated. The more visitor serving segments that participate, the more fair it is to other segments.
Why are retail, restaurants and attractions not included?
CIVITAS Advisors, the consultant firm responsible for most TBID formations in the United States, advised us that there are currently only (3) districts that include non-lodging businesses in their district. One of the reasons is the difficulty and time it takes in forming multi-segmented districts. The timing (during COVID) would be particularly difficult to go beyond the most common model of only lodging businesses, have proven to have worked in other destinations and further advised that such an effort would take many years to bring to fruition based on existing efforts underway in other places. Therefore it was recommended that we start with the proven model and revisit expansion to include other segments of business in the future.
Why are golf cart rentals being included?
Visit California established a state-wide assessment that includes lodging and car rentals. Likewise we are planning to assess lodging and cart rentals in the initial phase of the TBID. Cruise relations have long been a subject of importance to the golf cart rental companies and funding our current and future outreach to the cruise industry is likely to be on the golf cart operators’ wish list. As the most popular activity among day-trippers, assessing a fee on the rentals helps to support marketing to single day visitors while the lodging assessment does the same for overnight stays.
What will happen if the TBID is not successfully formed?
At minimum, Catalina will continue to struggle to compete with other destinations for awareness and visitation. It is very likely that the City of Avalon will seek to reduce current funding for tourism promotion, making it even more difficult to market the destination. An annual occupancy under 70% for our hotels and vacation rentals is NOT sustainable with the cost of doing business and will result in job losses island-wide.
What impact will an increase of 1% have on reduced visitor counts going forward?
Based on other recently formed districts, no, especially at a low rate of 1%. Modeling recently completed predicts the impact of 1% will have no negative impact on visitation but it will stimulate visitation growth due to the increased marketing dollars from the TBID assessment.
On a hotel stay of $300, the assessment will add $3.00. Below is a reference chart of fees.
What will the increased cost be for guests after the assessment is added to Hotel, Camping or Vacation Rental Stays and to Golf Cart Rentals?
Hotel or Vacation Rental
|Rental Rate||Assessment||Total Rate|
Golf Cart Rentals
|Rental Rate||Assessment||Total Rate|
Is this being done because the City of Avalon is taking away funding for Tourism Promotions?
For several years as the City enters its annual budget discussions, reduced funding of Tourism Promotion has been on the table. We have been lucky so far, so in part, yes. The timing of the TBID formation was planned pre-COVID-19 and in-part due to that concern. While the TBID will supplement the current funding received from the City of Avalon, the Catalina Island Tourism Authority needs to diversify our funding, should the current level of funding from the City of Avalon be reduced.
Why is this being done now?
Plans were first made to investigate the feasibility of a TBID in early 2019. When the various impacts of COVID-19 struck, the work was paused for a few months, then brought back for further investigation, thus the present timing.
The City of Avalon is planning to place on the ballot an initiative to increase TOT by 1%, but not share that revenue with Love Catalina - Catalina Island Tourism Authority for promotions. Is a 1% TBID fee and an increase of 1% in TOT too much to bear?
According to a recent analysis by the Travel Analytics Group, of several options investigated including a 2% TBID, a 2% TOT increase, and both shared/non shared resources if TOT were increased, the most impactful combination as far as driving a faster recovery from COVID-19 impacts was a 1% increase in TOT, fully dedicated to the City’s general fund AND a 1% TBID assessment fully dedicated to Tourism Promotion.
Have TBIDs been successful in other destinations?
Nationwide, TBIDs have been enacted by 184 destinations in 17 states, raising more than $430 million annually for local destination marketing. The growing popularity of this funding mechanism makes these destinations more competitive, providing them with additional funding to attract leisure travelers and offer incentives to attract conventions and meetings.
How would a total hotel checkout fee of 13.0% compare to other cities?
The assessment would be competitive with many other cities. For comparison, here are combined TOT and TBID assessments in Catalina’s Comp Set:
How does Love Catalina - Catalina Island Tourism Authority's marketing budget compare to that of other Visitors Bureau’s and Destination Marketing Organizations (DMOs)?
This list shows the annual marketing budgets of DMOs with whom Catalina Island commonly competes for visitors. *Note, the budgets listed below are TBID budgets only, and do not include other revenue sources the organization receives.
*Includes multiple jurisdictions.