A Room Tax Primer

In May of 2007 Door County became Wisconsin’s first true Tourism Zone. The villages of Baileys Harbor, Ephraim, Egg Harbor, and Sister Bay, as well as the townships of Egg Harbor, Gibraltar, Jacksonport, Liberty Grove, Nasewaupee, and Sevastopol were charter participants in the Door County Tourism Zone (DCTZ). Washington Island joined the Zone in August of 2007 and Gardner in May of 2008. The Door County Visitor Bureau (DCVB) would like to have all of Door County’s 19 communities as active participants in the Tourism Zone by 2011.

In brief, a 5.5 percent room tax is collected for overnight stays of 30 days or less and is tracked by the Door County Tourism Zone Commission. Once the tax is accumulated and tallied monthly, 30 percent is distributed directly back to the governing body of the community in which it was collected. To date, $830,000 has been disbursed to participating districts. The commission retains four percent to cover administrative expenses and the balance, 66 percent, is available for marketing through the DCVB, the legally designated marketing entity for Door County.

Just as important as collecting the tax is how the money can legally be spent. The DCTZ has a five-year contract with the DCVB. The intergovernmental agreements that tie the zone communities together also form the base of a partnership with the DCVB. Each community in the zone has representation on the commission, and communities that raise more than $300,000 in room tax are entitled to an additional representative.

For the DCVB, the influx of tourism zone marketing money has taken its former $250,000 annual marketing budget to over $1.5 million, a six-fold increase in its ability to get the message out about Door County. By law, the use of this money is restricted to the promotion of the zone communities, a fact that is monitored closely by the commission. It also excludes marketing for communities outside of the zone including Sturgeon Bay; the Sturgeon Bay Visitor Center has only $80,000 to promote its three business districts, festivals and fireworks. From its own recent experience, the DCVB understands that amount is insufficient to support long-range goals and broad-based marketing initiatives.

Significant investment has been made by the DCVB to increase the usage of doorcounty.com, the Bureau’s heavily visited Web site, and also in cultivating valuable third party references by hosting over 150 travel writers in all seasons over the last year.

Since the late 1990s, web-based marketing has taken off, especially with higher connection speeds and the continued growth of consumers using the Internet. In a mere 12 months, the Bureau’s online community has grown from around 20,000 subscribers to over 150,000. This growth is noteworthy because online customer behavior is qualitatively different from the traditional off line consumer. The growth of online “communities,” blogs and e-news subscribers allows a broader distribution of promotional materials at a fraction of the cost for conventional methods of information delivery like direct mail or magazine advertising. Typical list attrition can reduce a destination’s opted-in database by an average of 30 percent per year.

The Door County Visitor Bureau invests in travel writing professionals as well. In the past year, writers have turned their insights about the county into words and pictures in 76 different publications including AAA Living, Tampa Bay Magazine, Country Living, Bassmaster magazine, Group Tour magazine, Reunions magazine, Toronto Sun, Log Home Living, Journal & Topics, The Fish Whisperer TV show and many more. Because of the long lead times for different publications, several dozen articles are scheduled for publication later this year and into 2009. These third party references are more effective than space advertising and a single writer can generate several articles from just one visit to a destination.

The above-mentioned initiatives are significant and on-going but there is much more happening behind the scenes. Completion of a recent branding study will be the basis for a major campaign scheduled to commence in 2009. This initiative will take three years to fully mature, with the net cast further from the traditional Midwestern travel base towards a national campaign and, eventually, to an international effort. As with other ventures, this will extend the Door County message through broadcast, mail, print, and electronic media.

Other internal initiatives include strengthening the ties with other visitor centers, implementing a signage program to help visitors navigate the county, expanding and refining membership services, upgrading Web sites and improving information delivery between communities within the Zone. The DCVB will also continue to provide organizational and marketing leadership to the countywide collaborative Kingdom So Delicious promotion.

With all the focus on marketing, the DCVB is still a membership organization with members in and outside the DCTZ but still in Door County, and several member companies from Brown and Kewaunee Counties. About one third of the bureau’s budget is generated through membership fees and the production and distribution of the annual visitor guide. Funds generated from these sources are not under the jurisdiction of the tourism zone and are used to maintain services and non-marketing programming. Room tax money does not replace membership dues.

Door County is a relative late-comer to the collection of a room tax, a change recommended by all of the outside consultants brought in to help assess the destination’s climate for increasing overnight stays, retail and restaurant spending and the overall economic impact of tourism. With a combined state sales tax and room tax of 11 percent, Door County is almost at par with Wisconsin Dells, which has been collecting room tax since 1970; they turn 90 percent of the tax collected over to their convention and visitor bureau. Other combined tax rates are higher, as in Bayfield, 12.5 percent; Madison, 13.5 percent; Green Bay, 13.5 percent; and Milwaukee, 14.6 percent.

For more information please contact Sally Everhardus, Director of Administration for the Door County Visitor Bureau (DCVB) at 920.743.4456 or [email protected].