An increase in Centre County's hotel occupancy tax could have a significant benefit for the local economy and tourism, according to the Central Pennsylvania Convention and Visitors Bureau.
At Tuesday's Centre County Board of Commissioners meeting, CPCVB Executive Director Fritz Smith presented a request to increase the tax from 2.5 percent to 5 percent, the maximum allowable under Pennsylvania law for Centre and 56 other counties since 2016. Smith said that Centre County has the second lowest hotel tax in the commonwealth.
"Quite frankly, we want to grow the economy in Centre County," Smith said. "We want to grow jobs, we want to grow economic impact, we want to grow visitation. We want to increase our sales and marketing activity to generate more visitation and spending to businesses in Centre County. We want to help more nonprofits. We want to attract more meetings, more sports events, more family travel, more weekend getaways."
CPCVB receives hotel tax revenues for its operations in promoting tourism locally and to provide grants to nonprofits for events and initiatives to drive tourism.
Smith said that Penn State accounts for about 80 percent of visits and hotel stays, but that the county has wineries, museums, historic sites and festivals that could be attracting more visitors with some help.
"We love Penn State, but we also want to take the opportunity with these increased room tax dollars [to show] that Centre County is more than Penn State," Smith said. "We think we have great tourism assets here in Centre County and we want to be able to tell that story."
He added that, in State College, hotel occupancy rates for this year are 63.3 percent, trailing the state average of 65.5 percent and national average of 67.9 percent. He said the goal is to help fill rooms at hotels, bed and breakfasts and Airbnbs, including at off-peak times, to catch up to and eventually surpass the national average.
With the increased tax revenue, Smith said CPCVB will increase its grant program, which currently assists more than 30 nonprofits, to help more organizations, festivals and events expand their marketing and reach larger audiences.
CPCVB also would open a satellite visitors center in Philipsburg, Smith said, citing the area's importance because of visitors entering the county from the north and west.
It also would increase its advertising, marketing and sales and improve its website with more, and more engaging, content. The additional funding also would be used to obtain better research for actionable insights on marketing efforts, since most of CPCVB's current data comes from the state and is not always timely.
Smith said the bureau expects the increase would generate $137 million in its first year and, by the second year, result in 320 new jobs in hospitality and other sectors related to tourism. He also projects hotel occupancy rates would reach the state average by the second year and national average by the third year.
LeDon Young, Centre County Grange Fair committee member, said grants from the bureau have been pivotal in facilities additions that have helped Grange Park grow to become a nearly year-round attraction and "one of the outstanding equine facilities in the entire Mid-Atlantic region.” Most recently, a CPCVB grant helped with a project for climatization of restroom facilities.
"That might not sound real exciting, but that allowed us to host events starting earlier in the year and continuing later in the fall," Young said.
Grange Fairgrounds now hosts events from February to November, sometimes has three events happening in a weekend and in March will host for the first time the Pennsylvania Alpaca Owners and Breeders Association Showcase, with breeders, handlers, vendors, judges and other visitors traveling from across Pennsylvania and out of state and spending money at hotels, restaurants and stores in Centre County.
Young said marketing efforts made possible through CPCVB grants have been important to bringing in new events.
"There’s no question grants from the bureau have indeed made Centre County grow," she said.
Joe Thomas, owner, of the Bed and Breakfast at the Rock Garden in Boalsburg, said that most of his guests have come for Penn State-related events, but that he is beginning to see more visitors for agritourism, such as winery tours.
Commissioner Mark Higgins noted that Centre County has more than 1,000 farms and Fritz said CPCVB and the Chamber of Business and Industry of Centre County (CBICC) are launching a new agritourism initiative next month.
CPCVB's work to bring more visitors to the area play a big part in driving more guests to his B&B, Thomas said.
"We feel a 5 percent [tax] is going to be beneficial for the county not only countywide but also for smaller businesses like ourselves," he said. "We’re not the big guys. We have to work a little bit harder and we think this is a positive move. We strongly recommend the county think about this sincerely."
Jim Pollock, chair of the Moshannon Valley Economic Development Partnership and Philipsburg Heritage Days, said while Philipsburg does not have a hotel or motel within Centre County — "They're across the street in Clearfield County — community leaders are hopeful there will be one day. Meanwhile, the area drives tourism in other ways.
He said Heritage Days, which started out 20 years ago with just 10 vendors, had more than 125 this year and about 23,000 people who attended. Around the same time, the Emily Whitehead Foundation for pediatric cancer research holds its fundraiser golf outing at the Philipsburg Country Club, bringing in participants from all over the country who also visit the festivals in Philipsburg, State College and Boalsburg.
"Without the support of the Convention and Visitors Bureau and our grant we wouldn’t be able to do what we do," Pollock said.
Commissioner Michael Pipe, who has been supportive of raising the tax in the past, said that tourism in Centre County already generates about $800 million and the projected impact of the tax increase would push that to near $1 billion.
"The impact would be tremendous," Pipe said. "We really are the place to be in central Pennsylvania when it comes to visiting."
Higgins said that while State College is the 12th largest municipality in the state, it's estimated to be No. 5 for number of hotel rooms and an increase across thousands of rooms would be a significant boost.
Commissioner Steve Dershem said that its important to note the hotel tax is, mostly, not paid by Centre County residents but can help improve the local quality of life.
"Not only does it create jobs but creates other opportunities that makes our area that much more rich," Dershem said.
He added that he hopes to see increased efforts to promote tourism result in some bigger events that Centre County has not had before, saying he personally hopes to see an NHL Winter Classic game at Beaver Stadium one day.
The county first enacted a hotel tax in 1997 at 1 percent and raised it to 2.5 percent in 2002, when the maximum allowed was 3 percent. After new legislation allowed counties not already at the ceiling to raise it to 5 percent in 2016, some local hotel owners expressed concerns, saying it could deter guests as with other taxes it would bring the area well above the national average for hotel taxes.
Commissioners will further discuss the proposal on Jan. 8 and consider additional input. Pipe said if commissioners move forward with it, a vote on an ordinance to increase the rate could take place on April 1.