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Whatcom County expects to lose hotel to annexation, holds back tourism dollars

The Whatcom County Council didn’t give as much money to tourism groups as it could have.

The council decided to be thrifty in part because the county’s tourism-promotion fund will eventually lose a large contributor. Revenue for the fund comes from a tax paid by hotels and other lodgings.

“We could very easily spend some more of the money,” county Executive Jack Louws told council members at a Finance Committee meeting on Tuesday, Dec. 9. Louws is chairman of the Lodging Tax Advisory Committee, which recommended giving tourism groups $550,000 in 2015. The groups had asked for $808,078.

Council voted unanimously Tuesday evening to approve the committee’s recommendations.

“A large portion of our money is generated from the Hampton Inn,” Louws said. “If and when that (hotel) goes into the city of Bellingham, we’re going to have a tremendous reduction in the amount of money we have available.”

The tourism fund collects about $550,000 a year. Of that, 72 percent comes from the Hampton Inn, said Loni Rahm, president of Bellingham Whatcom County Tourism. The Hampton, which is near the Bellingham airport, is within the city’s urban growth area.

To maintain the same level of support, tourism groups would need to lobby Bellingham for the tax money that shifted into that jurisdiction, or find the money elsewhere.

“That’s a really good question as to where we would seek funding after the Hampton move,” said Rebecca Boonstra, visitor center coordinator with the Mount Baker Foothills Chamber of Commerce. “It’s possible we’ll lobby (Bellingham). ... We’ll have to see how that plays out in ongoing years.”

The county is keeping enough money in reserve to avoid suddenly shutting off its funding.

“That will ... give us the opportunity to wind down a lot of the commitments that we’ve made over the years,” Louws said.

County officials see an opportunity to make up for potential lost revenue. Vacation rentals, or homes rented to guests for less than 30 days, are unregulated in the county, and many do not pay a lodging tax, according to officials. The council is scheduled to consider new rules for vacation rentals next year.

“One of the conditions of being legal would be to make sure the taxes are paid,” Louws said.

A search on AirBnB.com gave more than 300 results for vacation rentals in Whatcom County. Estimating conservatively that 300 places are rented four weeks a year at $100 a night, the county or cities should collect $33,600 a year in tourism promotion dollars.

The Planning Commission will begin working on vacation rental regulations at its meeting at 6:30 p.m. Thursday, Dec. 11, at the Northwest Annex, 5280 Northwest Drive.

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