CALIFORNIA BUSINESS MINUTE
Tourism, LA
08-15-11
Hi, I am Tim Johnson and welcome to the California Business Minute.
Los Angeles has taken a major step forward with the creation of a new tourism
marketing district that will generate needed funds to more aggressively promote
the city as a premiere travel destination.
The unanimous vote by the Los Angeles City Council creates a citywide Tourism
Marketing District (TMD), a sustainable new funding stream that is projected
to yield an estimated $11 million a year to market Los Angeles to business and
leisure travelers.
Tourism is the region’s largest industry, employing more than 450,000 people.
Business leaders believe that TMD-funded marketing will help draw substantially
more visitors to the area. Currently, nearly 26 million people visit the region
each year, contributing $12 billion to the local economy and creating $160
million in tax revenue.
The TMD will be funded entirely by hotel visitors through a 1.5 percent assessment
at mid-sized and large hotels in the city and will be administered by LA INC., the
Los Angeles Convention and Visitors Bureau. Its approval by the City Council comes
amid strong support from city leaders and LA’s hotel industry. Among hotels with
50 rooms or more – the threshold for inclusion in the TMD – nearly 80 percent voted
in favor of the program.
Los Angeles spent roughly $11 million on sales and marketing in 2010, less than
half the amount spent by other large cities in California and approximately one-
eighth of Las Vegas’ marketing budget. New York, Chicago and Orlando also outspend
Los Angeles to draw visitors. TMDs are an increasingly popular method to expand
marketing budgets, having been adopted by more than 55 cities in California alone
in recent years.
“This is a great investment in our city’s top industry that supports jobs and
economic development,” said Bob Amano, Director, LA Hotel Association. “By
collectively adopting this small assessment, hoteliers as a community can have a
much greater impact when it comes to increasing occupancy than any of us could
accomplish individually.” Hotel owners are confident the 1.5% assessment will
not adversely impact current or future business.
I am Tim Johnson and this has been the California Business Minute.
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