This Whatcom industry is asking for a new tax. Here’s why
Both the Bellingham City Council and the Whatcom County Council have agreed to form a tourism promotion area and will set hearings on a proposed new hotel tax to fund it.
If it is approved, a $3 per-room per-night fee would be charged to guests in hotels with 40 or more rooms.
Such a tax would provide $1 million to $1.5 million annually to promote the local tourism industry, according to a report from Tara Sundin, Bellingham’s community and economic development manager.
“This is a potential new funding stream for tourism in our area,” Sundin told the Bellingham council in a committee meeting Monday, March 8.
State law allows the formation of such tourism promotion areas if more than 60 percent of affected hotels petition for it.
“The hoteliers are the ones who have chosen to assess their guests the fee,” Sundin told the City Council.
Most of the hotels that would be subject to the tax are in Bellingham, she said.
Bellingham’s City Council unanimously approved forming the tourism promotion area on Monday, and the Whatcom County Council voted 5-1 to approve it Tuesday, March 9, with Councilman Ben Elenbaas opposed and Councilman Tyler Byrd absent.
Such a fee would revive the local travel and hospitality industry, which has suffered devastating losses amid the new coronavirus pandemic, said Sandy Ward, president and CEO of Bellingham Whatcom County Tourism.
“The industry has been hit hard and the hotels are running at low, low occupancies,” Ward told the City Council. “As a result, funds from city and county lodging taxes collected in 2020 — which help fund 2021 tourism activities — will provide less money at a time when promotion is desperately needed.”
Further, the proposed tax would allow Bellingham to quickly revive festivals and events such as SeaFeast that were canceled by pandemic-related orders against large gatherings, Sundin said.
“Without this tourism promotion area, I can tell you it would probably be impossible to bring back those signature events that have been on hold because of covid. We probably couldn’t bring those back next year but with this funding source, we might be able to do that sooner than we would have,” she said.
Bellingham Councilwoman Hollie Huthman, who chairs the Community and Economic Development Committee, said the tourism tax would boost the entire downtown economy.
“All of the bars, restaurants, coffee shops, and retailers are involved in the circle too,” Huthman said at the meeting.
Bellingham’s 4% lodging tax provided revenue of $1.9 million in 2019 and slightly more than $1 million in 2020, Sundin told The Bellingham Herald in an email.
In unincorporated Whatcom County, the tax raised $940,000 in 2019 and $830,000 in 2020 to assist chambers of commerce and other tourism-related activities countywide, said Tyler Schroeder, deputy executive.
Travel-related spending in Whatcom County ranked fifth of Washington counties at $555 million in 2019, according to data compiled by research company Tourism Economics for the Washington Tourism Alliance and Washington State Destination Marketing Organization.
“We all know that the tourism industry has been hit the hardest by the pandemic and many of those jobs have been lost. We are hopeful that we can soon get into tourism recovery mode,” Ward told The Herald in an email.
Bellingham Whatcom Tourism’s budget from lodging tax collections was reduced by 40%, Ward said
In 2019, more than 3 million visitors to Whatcom County supported 7,443 jobs with a payroll of $244.9 million and travel spending generated $70.7 million in state and local taxes, according to the Bellingham Whatcom Tourism website.
“We know that in order to get the tourism industry back on track, we’re going to need money to advertise, market, and otherwise sell Bellingham and Whatcom County,” Ward told the Bellingham council.
“If we are going to compete with the likes of Walla Walla or Tri-Cities or Yakima, Tacoma, Olympia, we need to have enough money to do the job well,” she said.
