The Durango Area Tourism Office plans to explore increasing the lodgers tax to boost the budget for marketing Durango to tourists and bring more visitors to the city. It’s a process that would include conversations with lodgers, the city government and other groups with a stake in the tourism industry.
Ultimately, a tax increase would have to be approved by voters. There is no proposal yet for how much the tax could be increased.
In both Cortez and Montezuma County, the lodgers tax is set at 2 percent, and there are no plans to change it, Cortez Mayor Karen Sheek said.
Durango’s 2 percent lodgers tax is paid by people staying in hotels and motels. It is the second lowest in the state of Colorado, DATO Director Frank Lockwood said.
The tax generates a little more than $1 million annually, and about 68 percent of the money is spent by DATO on marketing Durango as a destination, he said. The remaining city money is spent on Durango Transit and special events, according to the 2018 city budget.
DATO also receives revenue from La Plata County’s 1.9 percent lodgers tax.
When it comes to per capita spending, Durango is lagging far behind some regional towns, Lockwood said.
Annually, Durango spends $62 per person on marketing, Pagosa Springs spends $414 per person and Telluride Mountain Village spends $2,000 per person.
“I think we’re not being competitive,” Lockwood said.
For every dollar spent on tourism marketing, there is an $8 return, he said. “It’s a great investment.”
Antonia Clark, owner of Toh-Atin Gallery and chairwoman of the DATO board, said a higher lodgers tax could increase tourism and aid sales tax collections, which have been nearly flat recently.
“I don’t think it’s because tourists are spending less; I think locals are spending much less,” she said.
Through September, general city sales tax collections are 2 percent higher than they were during the same period last year. During the same period, lodgers taxes collections were up 6.9 percent, according to city documents.
More tourist dollars will help offset some of the spending lost to internet shopping, keep downtown healthy and help pay for needed infrastructure improvements around town, Clark said.
“It’s the number one tourist experience to go shopping,” she said.
In addition to helping offset the need for higher taxes that local residents would pay, more tourists will help boost business, and she thinks that’s key for residents.
“It’s going to put more money in their pockets because their businesses are going to do better,” she said.
Clark would expect most of the increase in the lodgers tax to support marketing and some to directly support city services.