Atascadero OKs hotel fee to fund tourism efforts

Correction: An earlier version of this story incorrectly said that the Atascadero City Council approved allowing hotels to tax themselves to fund tourism promotion. Rather, the hotels will be allowed to charge customers more.

Atascadero will be the fifth city in San Luis Obispo County to allow hoteliers to charge more money specifically to help fund tourism promotion, the City Council decided Tuesday night.

Starting in June, the new assessment — separate from city coffers — will be 2 percent of the hotel charge, collected on top of a 10 percent bed tax that now goes to the city's general fund to pay for services such as police and fire.

The proceeds of the new assessment will go into a separate fund for marketing efforts as decided by local lodging businesses.

The idea of creating a tourism district came from a group of 12 hoteliers and lodging businesses that wanted control of where the marketing dollars go, according to city staff.

“(In the past), money has being used for local events and things like that, which is great, but we are always focused on dollars coming into the hotels,” said Amar Sohi, general manager of the Holiday Inn Express Hotel & Suites on West Front Road in Atascadero. He helped organize the tourism district effort.

“I’m hoping this BID will be a real start that’s not just hope but real action,” he added.

While the group hasn’t decided what to spend the money on yet, Sohi said one big push may be to bring shuttles to all the hotels to take guests to and from county events such as Paso Robles’ Wine Fest or the California Mid-State Fair in 2014.

Atascadero joins Paso Robles, Pismo Beach, Morro Bay and San Luis Obispo in forming a hotel levy district. Each is separate from the other. The county’s unincorporated areas that have hotels — which exclude areas such as Templeton and Creston — also have a business improvement district to promote wine country, according to the county Visitors and Conference Bureau.

In Atascadero, the money will be collected from hotel room receipts each quarter and put into a fund maintained by a board of directors. The city will also take 1 percent of the sum collected quarterly as an administration fee to cover staff time in separating the funds from the existing 10 percent bed tax and related paperwork.

Mayor Tom O’Malley recused himself from Tuesday’s discussion and vote because he owns a bed-and-breakfast in town.

The move toward forming a tourism district comes amid the city’s two-year, $234,000 push to better promote itself with a marketing contract with local firms TJA Advertising and Mental Marketing. That’s paid with tax dollars and is separate from the tourism district. The firms plan to unveil a new website later this year to inform tourists about city attractions.

The marketing contract also includes branding, marketing and advertising services. Earlier this year, the council adopted a new brand, “The Heart of the Central Coast,” to market Atascadero as a place where tourists can stay and still be close to nearby attractions. The marketing program promotes out-of-town attractions such as the beach and Hearst Castle and encourages visitors to check out Atascadero’s Charles Paddock Zoo and Lake Park.