Editor’s Note: Hotel-motel taxes are a popular way local governments raise money for their general budgets, self-promotion and tourist-related projects such as stadiums, trails and performing arts centers. However, experts say that the money does not come with any strings requiring proof that the promotional efforts are effective, and the assumption that visitors can be taxed without negative impact on the hotel business may be faulty. For an introduction to that discussion, see the Reporter’s story here.
Brookhaven wants to have more direct control over how its hotel-motel tax revenue is spent when marketing and branding the city and started its own Convention and Visitors Bureau this year, so it would not be dependent on an outside agency to frame its image. The City Council also hiked its tax rate this year as part of an emerging trend among cities to spend taxes paid by visitors to build its own infrastructure.
Brookhaven has heavily relied for several years on Discover DeKalb, the tourism agency for all of DeKalb County, to try to market the city. But with the new funds coming in from this year’s hotel-motel tax increase, the City Council decided it was time to focus on the city’s own individual restaurants, parks, festivals and other amenities to attract visitors and businesses.
The city still collaborates with and pays Discover DeKalb $575,000 in city hotel-motel tax revenue to advertise in major publications or on billboards, for example.
This year, Discover DeKalb spent $135,000 to run a “Discover Brookhaven” full-page ad for nine months in Delta Air Line’s Sky magazine. The magazine is seen by an estimated 300,000 fliers a month, according to city officials.
The June ad includes text at the bottom noting that Brookhaven is home to Oglethorpe University, the Atlanta Hawks (the team’s practice facility is located at Executive Park), the Weather Company (whose headquarters is in Perimeter Summit) and the annual Cherry Blossom Festival held each spring at Blackburn Park.
The ad also incorporates several images of city landmarks like Oglethorpe University and Dresden Drive. But it also includes several images that have nothing to do with Brookhaven, including the Fernbank Museum, Stone Mountain Park and the Michael C. Carlos Museum.
“They [Discover DeKalb] are promoting Brookhaven through their CVB and they’ve been doing it for about three years,” said Assistant City Manager Steve Chapman, who has been serving as the Brookhaven CVB de facto executive director this year. The Sky magazine ad was part of a “group buy” through Discover DeKalb and the city had no input on the design or layout, he said.
The city is expecting to gain more local control of how its hotel-motel tax revenue is spent now that the BCVB board has hired its first executive director after a five-month search. Renee Areng is moving to Brookhaven from Mississippi where she served as executive director of Visit Mississippi Gulf Coast for four years. She starts her new job next month.
Among Areng’s first tasks will be to produce a 2019 budget for the $1 million of hotel-motel tax money set aside for the BCVB, Chapman said.
“Our CVB is still in its infancy stage … and 2019 will be a transition year,” Chapman said.
Discover DeKalb marketing of Brookhaven
In 2017, the city collected about $3 million in hotel-motel taxes. Of that amount, $1.16 million went to Discover DeKalb for regional and national promotions. The city spent $225,000 on marketing and promotions. The city also transferred nearly $1.6 million of the tax money to its general fund, according to budget documents.
As part of its destination marketing, Discover DeKalb spent $200,000 promoting the Cherry Blossom Festival in 2017, including $70,000 on out-of-state billboards. They included seven billboards in Birmingham, Ala.; four in Charlotte, N.C.; nine in Columbia, S.C.; one in Chattanooga, Tenn.; and six in Nashville, Tenn. Discover DeKalb also rented billboards in Rome, Ga., and Calhoun, Ga.
Another $45,000 was paid by Discover DeKalb to 10 “digital influencers,” people with a large social media following and online presence, to promote the 2017 Cherry Blossom Fest on Facebook, Twitter and blogs.
Discover DeKalb measured success of the billboards and digital influencers through “impressions,” or views.
There were nearly 123 million impressions of tweets promoting the fest with the hashtag “#CherryFest17” during a “Twitter party” held about two weeks before the 2017 fest. Twitter parties are essentially an online chat using a specific hashtag that are meant to bring awareness to other digital influencers and people with like-minded interests. The county’s stats showed that there were only 306 clicks from Twitter to links about the festival.
The billboards received more than 20 million impressions, according to Discover DeKalb. Billboard impressions are measured using criteria such as traffic counts made available from various government transportation departments.
The billboard and digital influencers were part of new marketing tactics employed by Discover DeKalb, but the attendance at the 2017 weekend-long fest was about 15,000, approximately the same as 2016’s attendance.
In 2018, Discover DeKalb spent only about $95,000 on regional and national marketing and branding for the Cherry Blossom Festival. That included about $11,000 for social media influencers. Discover DeKalb, a sponsor of the fest, also sponsored a digital billboard campaign at no cost to the city.
The city spent about $290,000 on the Cherry Blossom Festival and budgeted $125,000 for music acts. Attendance over the two-day weekend fest, which included a rainy Sunday, was about 25,000, according to city officials.
Last year, city leaders convinced state legislators that hotel-motel tax money could be used to fund construction of the Greenway because, they say, it will become a regional and tourist attraction, much like the Atlanta BeltLine. A law was passed to raise the city’s hotel-motel tax this year from 5 percent to 8 percent, bringing in about $1.3 million more a year in hotel-motel tax money.
Of the 8 percent, or 8 cents of every dollar, state law allows 3 cents to be transferred into the city’s general fund for unrestricted purposes. Of the remaining 5 cents, 3.5 cents must be spent on promotion of events or marketing of activities to bring tourists to the city, with the final 1.5 cents required to build infrastructure that will promote tourism, in this case the Greenway.
The city used the new revenue stream from the tax increase to issue $12.6 million in revenue bonds to fund construction of the Greenway. The bond will be paid off over 24 years with annual payments of $675,000 in hotel-motel tax money.
Brookhaven’s portion of the planned 12-mile Greenway stretching from Mercer University to PATH400 and eventually to the Atlanta BeltLine includes about three miles between Buckhead and Chamblee. The City Council in October awarded a $7.99 million contract to Lewallen Construction Co. to build the first mile between North Druid Hills Road and Briarwood Road. A groundbreaking is set for Dec. 12.
Brookhaven is believed to be the first city in the state to use hotel-motel taxes to fund construction of a multiuse trail for tourism purposes. Hotel-motel tax dollars are typically spent to build facilities. The city of Atlanta, for example, used its hotel-motel tax revenue to back $200 million in bonds to fund construction of the approximate $1.6 billion Mercedes Benz Stadium.