Worthy tax hike

February 3rd, 2016

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February 3, 2016

Worthy tax hike

Hotel rate reaps big rewards for city, county

Journal Gazette

How did it happen that Fort Wayne hotels were booked solid one weekend in January?

Because Visit Fort Wayne and its partners in the hospitality industry have made the community a winning venue for sports teams, collector groups, genealogists, musicians and more. With a 1 percent increase in the county hotel room tax rate, the convention and visitors bureau could draw more visitors to northeast Indiana and fill its hotel rooms more often.

Language to increase the tax rate is expected to be inserted into a bill before the General Assembly’s short session adjourns. While stand-alone legislation and a hearing on the measure would have been the best course, local hospitality officials have a strong case to make forapproving the increase. Area lawmakers should have no reservations in supporting it.

An increase in the innkeeper’s tax would cost overnight visitors about 75 cents a night, according to Dan O’Connell, president and CEO of Visit Fort Wayne. The tax was last increased in 2007, from 6 percent to 7 percent. The state collects the tax, which is passed to the county and then to the Grand Wayne Center and Visit Fort Wayne. Five percent of the innkeeper’s tax is directed to the downtown convention center, which relies on the revenue to make bond payments. Two percent goes to Visit Fort Wayne, which uses the money to promote Fort Wayne and Allen County through visitor and convention marketing.

The Northeast Indiana Hospitality Association, which represents area hotel and motel operators, supports the proposed tax increase.

“What really sold the association members was that the additional 1 percent would not go toward adding more venue space, it would go toward the marketing and sales efforts of Visit Fort Wayne,” wrote Alishya Pêna, the group’s president, in an email. “One of Visit Fort Wayne’s uses of this 1 percent increase is to bring more conventions and sports groups to town. These typically are multiple day events, meaning more air travel, hotel room stays, multiple restaurant bills and shopping trips. All money coming into Allen County from outside of Allen County. To the association that is a great thing.”

O’Connell said Visit Fort Wayne would see about $600,000 in additional revenue with the increase. In marketing the second-largest city in the state, it now has the sixth-highest budget among Indiana convention and visitor bureaus. The money would allow Visit Fort Wayne to increase the number of national bids for convention trade from two each year to as many as seven. Landing even half of those would bring another 5,000 to 10,000 visitors to the city, fill 2,000 to 5,000 hotel room nights and draw as much as $10 million to Fort Wayne. 

The potential is there. The addition of Turnstone’s $14 million fieldhouse, for example, has opened up the opportunity to host dozens of adaptive sporting events, but Visit Fort Wayne needs the resources to sell adaptive sports groups on what’s available here.

“It’s a niche we can go after,” said Mike Nutter, president of the Fort Wayne TinCaps and Visit Fort Wayne’s board chairman.

Visit Fort Wayne has been successful in finding groups that are a good fit.

O’Connell and his staff have done a first-rate job of identifying and leveraging the area’s strengths to draw convention visitors, pulling events long held in Indianapolis and ensuring visitors leave the city wanting to return.

The hospitality industry is the county’s 11th largest, according to Visit Fort Wayne board member Gary Shearer, a senior vice president at Old National.

Its effect on the economy amounts to about $545 million a year. An increase in the innkeeper tax will allow Visit Fort Wayne to extend the region’s welcome to more prospective visitors.