Regional TIDs generate tourism marketing bucks

Published April 27, 2023 by Laura Anders Lee

Tourism improvement districts are new to Virginia, but they’ve been in place elsewhere for two decades.

Designated areas that raise funds for tourism marketing through hotel assessments, TIDs were passed by the Virginia General Assembly in 2021, and a Richmond-area TID is expected to launch this year.

“There are more than 200 TIDs already in the country,” explains Katherine O’Donnell, executive vice president of Richmond Region Tourism, which is expected to become Virginia’s first TID administrator in July. “If you don’t do it, you’ll be left behind.”

Under the law, a TID requires approvals from each locality as well as a majority of hotel owners who would pay more than 50% of the fees in each locality. 

“Coming out of COVID, hotels are ready to do this now,” says Eric Terry, president of the Virginia Restaurant, Travel & Lodging Association. “It’s really a no-brainer. The visitor pays for it, the hotels get oversight on how it’s being spent, and we ultimately drive business to their property. The industry can do a lot more together than any property could individually.”

Once local governments approve a TID, they contract with a nonprofit organization — such as Richmond Region Tourism — to collect visitors fees and promote district tourism. 

Richmond Region Tourism has proposed a 2% assessment on hotels with at least 41 rooms in Chesterfield, Hanover and Henrico counties, as well as the cities of Richmond and Colonial Heights and the town of Ashland.

So far, a majority of the local boards have voted in favor of the district, and if all goes as planned, O’Donnell expects the Richmond Region TID to go into effect July 1.

A 2% assessment on 170 hotels in the Richmond Region TID could raise more than $8 million annually for ad campaigns, as well as provide incentives to attract large meetings.

Visit Fairfax is considering the creation of a TID in the southern part of Fairfax County. Visit Fairfax president and CEO Barry Biggar would like to increase marketing to consumers and group sales operators domestically and abroad.

“Our TID would coincide with the new brand we established last year … ‘Potomac Banks: Explore Fairfax South,’” says Biggar. “These are areas with majority leisure travel, rich in historical attractions, outdoor recreation and the arts.”

In Norfolk, hotel owners are discussing a TID, but city council members have put the plan on hold to consider an alternate assessment plan for funding an arena. Under current law, TID assessments cannot fund capital projects.

Still, “it’s a wonderful piece of legislation and I remain hopeful,” says VisitNorfolk President and CEO Kurt J. Krause. “We are one gas tank away from 72 million people, but I need the money to market to those people.” 

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