Newport Beach Resorts Want to Privatize City Tourism District
Nine of them to raise rates to fund their own marketing to luxury travel, meetings segment.
Nine resort hotels in Newport Beach have asked the City Council to dissolve the city’s Tourism Business Improvement District so they can privatize their marketing to focus on drawing more bookings for them from the luxury travel and meetings market segments.
An agreement forming the tourism district, which was created in 2009, expired in January. The nine resorts are opting out and forming their own Marketing Assessment Partnership-a nonprofit “mutual benefit” corporation, according to a report in the Orange County Register.
The resorts seceding from the district include Balboa Bay Resort, the Hyatt John Wayne Airport Newport Beach, the Hyatt Regency Newport Beach, the Newport Beach Marriott Bayview, VEA Newport Beach: A Marriott Resort and Spa, the Newport Dunes Waterfront Resort and Marina, the Renaissance Newport Beach Hotel and the Lido House.
The city’s tourism district was formed in 2009 to help the major resorts in Newport Beach cope with the Great Recession following the global financial crisis. Resort operators funded the district with a 2% assessment that was added to nightly room charges and collected by the city.
The funding went to Visit Newport Beach, a tourism marketing group that promoted the city as a travel destination. In 2014, the assessment was increased in 3% in a 10-year deal to keep the tourism district going.
The nine resorts are planning to increase the assessment to 5%, funding that will be used exclusively to market the venues to the luxury travel and meeting market.
The group recognized that the self-assessments that funded the tourism district were a successful “proven concept,” but could cut out some “government compliance and bureaucratic baggage” by forming the mutual benefit corporation, which is allowed under California law, the newspaper report said.
The group said it would continue to market the city’s special event program and other initiatives to promote tourism through Visit Newport Beach.
Visit Newport Beach’s marketing to promote smaller hotels and retail outlets will be funded by an 18% share of the city’s 10% Transit Occupancy Tax that it applied to every nightly room rate.