Strong August boosts tourism tax revenue in DuluthAnyone who doubts that great summer weather has a big impact on Duluth tourism need look no further than this past August.
By: Candace Renalls, Duluth News Tribune
Anyone who doubts that great summer weather has a big impact on Duluth tourism need look no further than this past August.
The month’s abundance of warm, sunny days pushed hotel and motel tax collections up by 10.5 percent over August 2012, according to the latest city data available.
August usually is Duluth’s best month for tourism, but this year’s collections were “up significantly,” city treasurer Brian Hansen said.
The stellar August keeps Duluth on track for a record year in tourism taxes generated through its 1-percent, 2-percent and 3-percent hotel and motel taxes and a 1.75-percent food and beverage tax, he said. The city has several separate hotel and motel taxes, implemented at different times through the years.
“We’re looking to have our best year ever,” Hansen said, noting the city is in line to surpass last year’s record $7.3 million. As of August, $5.1 million in tourism taxes have been collected this year, up 5.6 percent over the same period last year.
The comparison of 2012 and 2013 taxes, however, doesn’t include $1.1 million collected last year from an extra half-percent tax on lodging and a half-percent food and beverage tax, both of which expired in November 2012. If those extra taxes were included in the figures, Duluth would not top last year’s $8.4 million total, Hansen said.
But August’s collections of nearly $913,000 were just $73,000 short of those in August 2012, when the added hospitality taxes were in force.
“We had a good month,” Hansen said of this past August. “I think it was all about the weather. July with Tall Ships was very good as well.”
August had another advantage: It had five Friday-Saturday combinations, compared with four and a half last year.
“That’s when you see a lot of tourists come through,” Hansen said. “That’s when the families come, because people are coming for a weekend.”
Duluth-based ZMC Hotels’ boost in lodging revenue in August was similar to the 10.5-percent increase in hotel and motel taxes collected by the city. ZMC’s Inn on Lake Superior in Canal Park did even better, with revenues up 12 percent over last year, said Jon Driscoll, ZMC’s chief operating officer. ZMC also operates the Edgewater Hotel and Waterpark, Days Inn Lakewalk and Best Western Downtown in Duluth.
“We think there are a number of reasons,” Driscoll said of the increase. “Duluth continues to improve as a destination choice with the new attractions at Spirit Mountain and continuously improving retail and restaurant choices, along with our natural attributes.”
The continuing economic recovery also has played a part, he said.
“The (Twin Cities) metro has fully recovered from the recession, and Canadian traffic seems to be as strong as ever,” he said.
Besides good weather, August also was a good month for meetings and conventions, which contributed to lodging revenue, said Terry Mattson, CEO and president of Visit Duluth, the city’s visitors and tourism bureau.
“We’re hitting on all cylinders in all the different markets,” said Mattson, who said he expects a strong fall as well.
Meanwhile, taxes collected in August from the food and beverage tax were up only moderately, compared with lodging. But that lower, 3.2-percent increase is not surprising, Hansen said,
“Food and beverage is not just based on tourism,” he said. “We as residents eat out, too. So we as residents can’t significantly change our activity without an increase in population. It’s a large base that’s not that affected by tourism.”
Hospitality taxes collected by the city help fund tourism-related activities and attractions such as the Great Lakes Aquarium and the Duluth Entertainment Convention Center.