MLT FLOATS TBID HIKE
Mammoth’s Tourism Business Improvement District (TBID) is up for renewal in 2023, and TBID revenue comprises more than two-thirds of the Mammoth Lakes Tourism (MLT) marketing budget, so one can imagine MLT is keenly interested in getting a renewal approved sooner rather than later.
Which may be why MLT hosted a “TBID Renewal Advisory Panel” meeting on Tuesday afternoon. The event was held in the Empeiria High Sierra Hotel (formerly the Best Western) conference room.
As MLT Board Chairman Jeremy Goico explained, MLT’s TBID Steering Committee has met approximately a half-dozen times thus far to talk about the renewal and develop recommendations.
Tuesday represented the Steering Committee’s chance to unveil its proposals to the business community.
The highlights: The Steering Committee suggests renewing the TBID for a 10-year period (previously, the TBID has been passed in two, five-year increments). And the Steering Committee wishes to increase the TBID fee .5% across the board. Existing TBID rates are 1% for lodging, and 1.5% for restaurants and retail.
Mammoth Lakes Tourism Executive Director John Urdi said the increase is needed to fund commercial airline subsidy for proposed new markets. Dallas, Phoenix and Salt Lake City were mentioned.
It was also implied that an increase in TBID is needed to offset an anticipated cap of the Town’s annual contribution to the local marketing organization. The Town currently dedicates 2.35 points of Transient Occupancy Tax (TOT) revenue to marketing. In 2022-2023, that 2.35 points is expected to equate to $2.9 million. The Town, said Urdi, wishes to cap its marketing contribution at $2 million.
Urdi said TBID revenue for the 2021-2022 fiscal year is estimated at $6.4 million.
The TBID requires 50% plus one for passage. It is voted upon by members of the business community. Votes are weighted based upon the percentage of fee collected, though individual businesses are capped at a 40% voting share.
Locally, Mammoth Mountain gets a 40% TBID vote though it pays a total of 44% of all TBID collections.
So in essence, the public gets taxed without having a say in the matter.
Most business owners say they simply “pass through” the TBID fee to their customers, and that complaints are few and far between. As Stellar Brew owner Andrea Walker said, “I don’t vacation-shop based upon taxes, and people who look at their receipts are rare.”
“We have not had mass uprisings over incremental price increases,” said Urdi.
John Farber, owner of Giovanni’s, said a lack of price sensitivity may be true for the tourists, but not for locals. He said he’s noticed a decline in his local lunch business, and he attributes to it a price issue.
Kicking off the meeting, Mr. Urdi gave a lengthy presentation where he outlined the benefits increased marketing have brought to town over the past decade or so.
For example, he said revenue growth across all sectors has grown from $207 million back in 2013-2014 to $471 million in 2021-2022.
TOT revenue is expected to top $26 million during this fiscal year.
Compound annual growth since TBID implementation has exceeded national and state growth averages, as well as the growth of competitors like Big Bear and South Lake Tahoe.
Michael Raimondo, owner of the Old New York Deli and Bakery Co., was not invited to Tuesday’s meeting. He does not believe that MLT deserves all the credit for the recent surge in business.
“The success of the IKON pass growth has loaded the MLT piggybank,” he said. “They’re riding the coattails of that success and patting themselves on the back for it.”
Raimondo is fine with a TBID renewal, but doesn’t believe MLT should receive a dime of Town funding via Measure A.
“100% of it [Measure A] needs to go back to the town for housing,” he opined.
The MLT Steering Committee would disagree.
After years of struggling to market air service effectively, MLT believes it’s hit on something with its Denver route. Particularly in terms of connectivity. As Urdi explained, the Denver flight opened 120 possible “perfect connections” (connections which can be completed in less than two hours). L.A. offered 12 such connections.
And MLT is aggressively marketing to the northeast as a result.
Visitors who come via air versus car tend to stay longer and spend more. And the longer stays have the added benefit of alleviating pressure on housekeeping to turn over rooms.
The decreased flight cancellation rate with flights going in and out of Bishopwas also cited as a reason to build on the Denver success and expand.
The ultimate goal is 75,000 enplanements a year.
But the cost to kick off a new route is high. Each new market is a risk of $2 million in initial subsidy according to Urdi.
Kittredge Sports owner Tom Cage and Footlooose Sports owner Silver Chesak were leery of adding a half-point sales headwind to their ongoing battles with internet competitors.
Cage also said Mammoth Mountain will disproportionately benefit from the air service expansion.
Urdi rejoined that the law says TBID doesn’t have to benefit everyone equally.
MLT hopes to get a TBID renewal in place by September. Stay tuned.
