State College, PA - Centre County - Central Pennsylvania - Home of Penn State University

'We're Going to See Some Amazing Things Happen.' Officials Discuss Plans for Hotel Tax Revenue

by on March 04, 2019 4:25 PM

A month after Centre County commissioners approved the first local hotel occupancy tax increase in 17 years, representatives from the Central Pennsylvania Convention and Visitors Bureau, county government and area nonprofits detailed on Monday how they expect the increased revenue to be a boon for the region's economy and tourism.

The increase, which goes into effect on April 1, doubles the occupancy tax from 2.5 percent to 5 percent, the maximum allowable under Pennsylvania law. Centre County has had the second lowest hotel tax in the state, behind only Bedford County.

The visitors bureau receives hotel tax revenues for its operations in promoting tourism locally and to provide grants to nonprofits for events and initiatives to drive tourism.

Fritz Smith, CPCVB executive director, said at a press conference on Monday at the Visitor Center that nearly all of the new funds generated by the tax increase will be used directly for attracting more visitors to the region through a variety of sales and marketing initiatives, including expanding the grant program.

"We had quite frankly fallen behind here," Smith said. "We had fallen behind from a sales department standpoint, technology standpoint, staffing standpoint. We just got behind the curve. We knew we needed this increase to come up with the resources to do the effective sales and marketing that attract more people to Centre County, help fill our hotels and bed and breakfasts and attractions and restaurants."

Before the new money begins to come in, the bureau has already launched short-term promotions to boost springtime tourism and has enhanced the grant program. In the longer term, CPCVB is embarking on an ambitious plan for marketing and rebranding.

That will include ramping up digital advertising, a website overhaul, working with Penn State's Recreation Parks and Tourism Management on a yearlong survey to better understand the profile of Centre County's visitors, and working with a marketing firm and the bureau's own marketing committee on a new brand and image that will begin to be rolled out in July.

"The name, Central Pennsylvania Convention and Visitors Bureau, just doesn’t seem to resonate with people outside of this region," Smith said. "They don’t get a clear image of who and what we’re talking about. So there will be some brand identity that is changed."

It also will mean expanding efforts to draw major meetings and events to the area, and exploring a possible expansion of the Visitor Center to the Philipsburg area. Smith said that while Penn State is a vital part of the region, CPCVB wants to showcase everything else the county has to offer as well, such as fairs and festivals, historical sites, outdoor experiences, wineries and agritourism. 

Smith added that the new Nittany Valley Sports Centre and the soon-to-open major new expansion of C3 Sports, in combination with Penn State facilities, are giving the county the potential to be a "premier destination" for regional and national sporting events.

By drawing more visitors to Centre County, the aim is to improve hotel occupancy. The county's hotel occupancy rate last year of 63.5 percent was about 1 percent behind the state average and 2.5 percent behind the national average. Smith noted that after years without a new hotel being built, the county saw two new ones in two years with Hyatt Place in State College and Wyndham Garden in Boalsburg.

State College also has the third highest number of listings in the state for Airbnb rentals, which also are included in the new occupancy tax.

"The private sector has some confidence in the growth of the tourism in this county, but it also puts pressure on us as an organization to fill those rooms and draw more people here," he said. "We think with this increased sales and marketing we can catch up."

Increasing occupancy rates by a few percentage points will mean tens of thousands of new visitors and hundreds of millions of dollars in economic activity, Smith said. It also will mean new jobs, with a projected addition of more than 500 jobs in the next three years.

With the increased tax revenue, which is expected to be around $4 million in the first year, CPCVB also will double the grant program, helping a wide variety of organizations expand or create new efforts that add to the cultural draw of the region. The Pennsylvania Military Museum, Grange Fair, the Central Pennsylvania Festival of the Arts and Philipsburg Heritage Days are just a few of the dozens of groups that have benefited from the grant program.

Elaine Meder-Wilgus, who co-organized the inaugural Central PA Theater and Dance Festival in 2018, said that the tourism grant was critical in the first year, and is again for the second edition of the festival, which will be held June 21-23 in downtown State College.  Last year the festival had more than 100 events with more than 3,300 audience members. 

"The number one stumbling block for any arts organization [is] marketing," she said. "Finding money for marketing is imperative. We have the talent. Somehow, miraculously, we have the time. But rarely do we have enough funds to get the word out about what we are doing."

She added that the festival became an umbrella organizations for the 19 arts groups that formed its founding membership, and the grant for marketing helped promote their individual events throughout the year.

Centre County Commissioner Mark Higgins, meanwhile, said that Arts Festival sets a good example for leveraging the economic power of the arts, and he would like to see the area build on and add to its existing festivals. He cited the Stratford and Shaw festivals, theater festivals that both take place from spring through fall in small Ontario, Canada towns and generate hundreds of millions of dollars in economic activity and tax revenue.

"We need to develop more large festivals and events to draw more tourists to the county and also further improve our quality of life," Higgins said. "I know we have wonderful people here that just need some additional tools and financial support that the tourism grant program will assist them in helping their dreams come true."

Commissioner Steve Dershem said the increased events will not only boost tourism and the economy, but will enhance quality of life for county residents.

Dershem said he would like to see initiatives to draw more major events such as an NHL outdoor game at Beaver Stadium and music festivals.

"We’re going to see some amazing things happen," he said. "We need to promote Centre County and get some of those home runs here."

"The innovative approach we’re going to be taking with these additional funds is going to be special to watch," added Commissioner Michael Pipe.

Organizations interested in applying for a tourism grant can do so online until 4 p.m. on March 31 at Requirements and restrictions can be found here.

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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