(US) National Travel and Tourism Week, 2019: DC's tourism tax revenue stream should support sub-city efforts

Most cities and counties levy some form of what are called tourism taxes. Usually this includes a charge on hotel room stays*, rental cars, parking (although that's a charge on commuting as well), and a portion of meal taxes.

(Communities also reap tax revenues from income taxes on businesses and workers, and sales taxes on the sale of goods and services to tourists.)

Separately, some cities facing forms of overtourism are assessing capitation fees as a way to manage the flow of tourists and to mitigate some of the costs.

Additionally, many cities argue that some of the tourism tax revenue stream should be captured to support non-tourism related needs ("Potholes, water woes: New Orleans seeks more of tourist tax," Associated Press).

The majority of images used in the DC Cool tourism marketing campaign are generic "images of nowhere" and don't feature landmarks distinctive to DC.

This money is used mostly for three things: (1) to pay for convention centers, "convention hotels" and other tourist attractions depending on what is approved ("Nashville Music City Center: Absorbing more tax revenue than it needs?," Nashville Tennessean) and (2) tourism marketing, through what are called "destination marketing organizations" or "convention and visitors bureaus."

A number of cities also use this revenue stream (3) to pay for sports facilities ("How best to invest New Orleans' tourism tax revenue?," New Orleans Times-Picayune; "How tourism taxes will fund the new Rays Stadium," SBNation; "Report: Hotel tax revenue meant for Raiders' stadium falls short," USA Today).

DMOs usually market (1) convention centers (and the funding stream may support subsidies to land particular events), (2) develop marketing campaigns targeting various consumer travel market segments and travel professionals, (3) maintain websites and other strategic communications systems and products; (4) operate visitor centers; and (5) develop and distribute tourism marketing materials of various sorts including guides and maps.

An optional item (6) is the support of sub-city tourism efforts including "destination development" including the development of marketing campaigns.

I first learned about the concept of destination development in DC because of the work of Kathy Smith, who authored the book Capital Assets: A Report on the Tourist Potential of Neighborhood Heritage and Culture Sites in Washington, D.C., and founded the organization now called Cultural Tourism DC. DC's cultural heritage trails signage and brochure program is one of the programs launched by the organization.

Capital Assets identified local assets already visited by tourists; neighborhoods and sites that were "destination ready" with support; and areas and sites that were not ready for tourism.


Tourism Development Handbook is out of print, but except for one chapter on Internet marketing, it's still excellent. Another good resource is the Community Tourism Planning Guide by Nova Scotia Tourism.

As discussed in previous entries, DC's DMO doesn't operate a substantive visitor center, nor does it support the creation and operation of sub-city visitor centers, or have a systematic program supporting sub-city destination development.

Mostly it spends its time and money marketing the convention center.

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* I argue that "home stays" like Airbnb should still be subject to a community's regular hospitality-related taxes.