Questions on Bed Tax
What does the “Tourism Bureau” part of the Sedona Chamber of Commerce and Tourism Bureau do?
We market Sedona and take the lead in managing our biggest industry, which has a $600-million-dollar annual impact on our local economy and is directly responsible for approximately 10,000 local jobs.
As a nationally known Destination Marketing and Management Organization (DMMO) as certified by Destinations International, we have contracted with the City of Sedona to promote and manage tourism since the 1990’s.
We work with visitors, travel agents, tour operators, media and meeting planners to distribute official destination information, helping them in their destination decision-making.
As Sedona has become more popular with visitors from around the world, we are shifting our focus to include environmental preservation and community quality of life issues in managing our visitors.
Later this year, our first Sustainable Tourism Plan will set out strategies to help us place sustainability at the heart of the visitor experience.
Does the city have input on the bed tax percentage?
Yes. The bed tax is established by action of the City Council. Since 2013, the bed tax paid by lodging facilities within Sedona’s city limits is 3.5 percent.
The state grants Arizona cities the authority to levy a tax on hospitality businesses for the promotion of local tourism.
Who determines how much of the bed tax goes to the Chamber?
The City Council makes that determination.
In 2013, after discussions among the Chamber, city staff, representatives of the business community and elected officials, the Council voted to increase the bed tax from 3 percent to 3.5 percent in order to increase expenditures for tourism marketing.
At the same time, the City Council voted to allocate 55 percent of the collected revenue for destination marketing activities.
State law grants cities the authority to enter into a contract with a nonprofit organization such as the Chamber for the purpose of using bed taxes to promote tourism. The City has contracted with the Chamber of Commerce & Tourism Bureau for tourism promotion services since the 1990s.
The Chamber is the only accredited destination marketing organization in the greater Verde Valley. We have a specialized knowledge of what attracts tourists to Sedona and what tourists expect to experience in Sedona. The Chamber also understands the specific markets from which the City desires to attract visitors.
The most recent seven-year contract between the Chamber and the City of Sedona was approved by the City Council in 2017.
How much are you getting from the bed tax this year?
Due to an increase in bed tax revenues, 55 percent of the total for FY 19 was an increase of $268,900 from the previous year. We agreed to direct this increase to Sedona in Motion transportation improvements rather than additional tourism marketing. Our total budget for FY19 is $2.17 million.
You can see exactly how it will be used here.
Does the city receive all monies from the bed tax and then distribute to the chamber?
If so, does the city have input on how the Chamber markets Sedona?
The City Council identifies priorities and policy direction to assist the Chamber in accomplishing the outcome desired by the City. The Chamber develops the destination marketing and reinvestment program plan based on the expected results identified by the City Council.
The scope of the contract requires the City and Chamber to collaborate each year, in a joint work session, to set specific goals and objectives for tourism. The Chamber presents a full scope of work to the Council based on this collaboration that includes detailed performance metrics and delivers quarterly progress reports and presents twice per year (minimum) in public meetings.
Every year, the City Council reviews and approves the Chambers annual Destination Services Plan and proposed budget prior to allocating bed tax revenues to fund the Chamber’s marketing activities.
What do you do with the bed tax money?
We work diligently to maximize the impact of our marketing dollars. In addition to advertising buys in key out of state markets, this year we are reinvesting 23 percent of the budget in tourism-related infrastructure here in Sedona.
We will also complete our first-ever Sustainable Tourism Plan, which will guide our tourism management approach to carefully preserve our environment and quality of life while placing community character and expectations at the heart of the visitor experience.
Are you successful?
Yes, we are. One way to measure success is by looking at the contribution tourists make to the city services we all require and enjoy.
In addition, our small town enjoys world class resorts, restaurants, galleries and cultural events thanks to our popularity as a visitor destination.
Are you responsive to the community?
Because we know Sedona’s tourism management must reflect the sensibilities and desires of Sedonans, all our actions are informed by community input.
Our volunteer Board of Directors reviews and approves our annual budget and Destination Marketing plan.
Each year, the Sedona City Council reviews, discusses and votes on our budget and Marketing Plan in public meetings.
In the course of developing the plan, we consult with community organizations, residents, nonprofits and land managers so that each year, our approach mirrors the community’s tourism-related input.