Arroyo Grande will become the sixth city in San Luis Obispo County to form a tourism promotion district to bring in new revenue specifically to market the city and its hotels.
The Arroyo Grande City Council voted unanimously last week to establish the Arroyo Grande Tourism Business Improvement District, which is expected to raise about $140,000 a year by assessing a 2 percent levy on occupied hotel rooms.
That’s on top of a 10 percent so-called bed tax already charged by the city, but this new money would go into a separate fund and be used specifically to promote the city as a tourist destination and increase overnight stays in its lodging businesses.
The new fee, which will take effect July 1, will impact the city’s 10 lodging businesses, which collectively have more than 400 hotel rooms. The new levy will not apply to vacation rentals and RV parks.
Formation of the district could not have moved forward if written protests had been received from business owners representing 50 percent or more of the assessments to be levied. The city had received one protest letter at the time a staff report was prepared for the council meeting.
An advisory board composed of hoteliers will make recommendations to the council on how the money is spent. The board includes Kevin Thornton of Best Western Casa Grande Inn, Andrew Jenest of the Hampton Inn & Suites, and Mike Panchal of the Aloha Inn.
Grover Beach is now the only city in San Luis Obispo County without a tourism district. Atascadero became the fifth city to form a tourism district last month, with a 2 percent levy. The other cities have assessments ranging from 1 percent in Pismo Beach to 3 percent in Morro Bay.
In a previous interview, Grover Beach Mayor Debbie Peterson said a push to form one could move forward in the next year, as two local groups, the Grover Beach Business Alliance and the Merchants Association, have expressed interest in establishing a district.