Decision on room tax rate dooms tourism program

By Observer editorial May 18, 2010 12:31 pm
The City of La Grande Budget Committee made a decision Wednesday that can only be described as, to use an old phrase, pennywise and pound foolish. The budget committee chose to not recommend a 2 percent increase in the transient room tax rate and instead cut the heart out of funding for the area’s tourism promotion. The cut, from about $95,000 to $26,000, basically will kill the area’s tourism promotion program. (For the sake of full disclosure, The Observer gets a small slice of that budget through Union County Tourism’s participation in our annual Visitors Guide.)

The budget committee apparently heeded the opinion of local motel owners who claimed that the increase would impact the number of travelers staying in La Grande motels. The motel owners said prospective customers would head to Baker City or Pendleton.

The decision, if accepted by the city council in June, will mean that local motels will continue charging a 9 percent room tax rather than an 11 percent. For a $100 room, that amounts to an extra $2. For a $50 room, it’s an extra $1. Hotel guests who would be willing to travel an extra 50 miles to save a dollar or two aren’t savvy travelers, and certainly wouldn’t be likely to spend much money while they are in the community.

It’s unlikely that many hotel guests really care much about the room tax. The cleanliness of a property, the room rate, amenities and customer service weigh much more heavily with people than does the room tax. How much consideration do our local motel owners, who jumped all over the room tax proposal, give to those things that matter most to travelers? Based on the experience we’ve heard from guests to our area, we have to wonder.

The real cost will be in the loss of tourism promotion. It will have a much more significant impact on local motels and the community than would a dollar or two more in room taxes. Gone will be promotion in regional and statewide publications. A coordinated tourism campaign. And most likely a staff person to coordinate that campaign. Union County will be one of the few areas not well represented in tourism promotions that feature virtually every area of the state, all of which are competing for those tourist dollars.

Granted, the budget committee was in a difficult predicament. The city is in dire straits financially, and has made some cuts throughout its general fund. Whether there was leeway for additional cuts, such as negotiated furlough days or reducing the city’s share of health insurance premiums, is open to debate. But since the city didn’t go that direction, a slight increase in the room tax would have been an easy albeit controversial way to go. Instead, the committee chose to grease the squeaky wheel and virtually bring to an end the region’s tourism program. The committee put the motel owners’ interests above the community’s interests.

Not a wise decision. The possible loss of the program will prove far more significant than the impact a 2 percent increase in the room tax would have had. The council should reconsider the budget committee’s recommendation.