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Tough Decisions: Where does Redondo Beach turn to Promote Tourism?
Redondo Beach has long been a destination city dating back to its inception. The history of Redondo Beach is layered with generations of a thriving tourism economy. That is why the hoteliers and the city decided to establish a visitor’s bureau in 1991 with a 2 percent increase to the Transient Occupancy Tax (TOT) from 8 percent to 10 percent. At that time, city officials believed expanding a long-standing relationship and sharing office expenses with the Chamber of Commerce was the best path forward.
Now, 27 years later the city has decided to move in a different direction. After continued increase in occupancy rates while adding hotel rooms, city officials felt it was time to look at how much money should be allocated towards promoting the Redondo Beach as a destination city. Five years ago the TOT was earning the city approximately $3 million and today with the efforts of the Visitors Bureau tourism promotion and a strong economy the TOT is earning the city nearly $8 million.
So, what are the options?
Many feel that some form of Tourism Improvement District (TID), a type of business improvement district makes the most sense. TIDs are formed through a public-private partnership between the local government and the businesses in a district. TID funds are usually managed by a nonprofit corporation, generally a Convention and Visitors’ Bureau, hotel association, or similar destination marketing organization (DMO).
In California, tourism improvement districts are formed under the Property and Business Improvement District Law of 1994, the Parking and Business Improvement Area Law of 1989, or a similar enabling ordinance adopted by a charter city. California districts are also subject to other laws designed to ensure approval by business owners paying the assessment and accountability by the managing body to those business owners. Tourism improvement districts are formed with a majority of assessed businesses (hotels in this case) consenting and the local government’s approval.
However, there are a lot of questions on how it would be put together and who would fund it. Is it just for hotels? Should other destination-based businesses such as restaurants, recreation businesses, and retail shops that benefit from tourism pay into a TID? What do you do with businesses that already are in a Business Improvement District like Riviera Village, or businesses that pay marketing dues as part of the Harbor or Pier Associations? Does the city have a role funding an entity through the existing TOT revenues collected?
When comparing Redondo Beach to many other California coastal communities that have self-assessed T-BIDS or similar structures, their TOT is lower than Redondo Beach, typically 10 percent; Redondo Beach TOT is 12 percent. If Redondo Beach hotels agree to assess themselves another 1-to-2 percent they may put themselves at a disadvantage with much of their competition and possibly lose market share.
One thing is certain, something will need to replace the Chamber and Visitors Bureau to help promote the City of Redondo Beach as a destination. Now, it is up to the industry leaders and the city to come together and figure out how to best promote Redondo Beach.
Attention ALL Members of South Bay Chambers! Redondo Beach Chamber Annual Regional Mixer
Join us at the Seaside Lagoon for an evening of networking, entertainment, opportunity drawings, great food and more! We’re inviting members of 13 local Chambers to enjoy the flavors of our local Redondo Beach Chamber Member restaurants, while meeting new people and catching up with old friends. The fee is $10 for any member of a South Bay Chamber, or $20 for non-Chamber members. This annual event is always well-attended.
We hope to see you there on August 23rd at this premier summer celebration!