Sonoma City Council approved renewing the city’s tourism improvement district for a 10-year-term to increase tourism and revenue for the city.
Sonoma City Council voted Nov. 6 to renew a 10-year-term for the tourism improvement district, a program designed to promote Sonoma as an overnight tourist destination and help raise revenue for both businesses and the city.
The Sonoma Tourism Improvement District (STID), was formed in 2012 to promote tourism in Sonoma in partnership with the Sonoma Valley Visitors Bureau. The STID generates revenue for marketing through a 2% assessment added to all overnight stays within city limits at hotels, motels, bed and breakfasts, guest houses and vacation rentals.
Sonoma Mayor John Gurney, who sits on the tourism improvement district board, supports the STID’s renewal for a 10-year-term.
“I’ve had the opportunity to see them in operation, how they manage these funds, and I can attest to the fact that they make investments in the interest of generating tourism,” Gurney said. “And that tourism then generates revenue for the city, if we’re lucky. So it’s a pretty good partnership and I support this.”
The STID is estimated to generate $1 million annually for promotion of travel and tourism in the city.
Transient Occupancy Tax, also known as “hotel tax,” is a key indicator of how healthy tourism is in the city. Sonoma’s TOT is currently 13% and is applied to a customer’s lodging bill for stays of less than 30 nights.
As the city is experiencing a deficit of nearly $3 million, and has a projected 7.9% drop in TOT revenue from the previous year, working toward increasing tourism through the STID supports Sonoma’s capital improvement plan.
TOT revenue goes into the city’s General Fund and provides money for government services provided by the city. For the 2023-24 fiscal year, TOT revenue brought in $6.4 million.
The Sonoma Tourism Improvement District contracts with the Sonoma Valley Visitors Bureau to develop and implement a comprehensive plan to market the city as an overnight destination. The STID includes all current and future lodging businesses available for public occupancy and located within the city limits.
Civitas, a firm specializing in tourism and travel promotion funding strategies, worked with the city to develop the renewed STID.
Throughout the state, tourism improvement districts have successfully increased tourism and length of stay at lodging businesses.
“Currently, there are 115 tourism improvement districts in California and over 213 in the U.S. These districts are designed to raise stable funding to promote destinations and bring more overnight stays,” Carson Lambeth vice president of business development at Civitas said. “In turn, they increase the economic vitality of a community by creating more jobs and increasing commercial commerce.”
Local businesses demonstrated support for continuing the STID.
“We’ve created a new management district, which will be the governing document for the district the next 10 years. We then asked lodging businesses to sign a petition in support of the district, and we reached well over the 50% support and yes petitions from the lodging requirement,” Lambeth said.
Tourism improvement districts are formed pursuant to the 1994 Property and Business Improvement District law and have to benefit those that pay the assessment, Lambeth said.
Lodging business owners within the district fund the STID, and those funds are used to provide services desired by and in benefit of the businesses, such as visitor center services and the promotion of events that drive overnight business to lodging in Sonoma.
“It is important to note that this is an assessment, not a tax. And the legal definition of an assessment is that it has to benefit those that pay in. In this case, that’s the lodging providers,” Lambeth said.
You can reach Staff Writer Emma Molloy at [email protected].
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