Bureau Gets Kent Lodging Funds

November 23, 2005
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GRAND RAPIDS — The Kent County Board of Commissioners recently awarded the Convention and Visitors Bureau 30 percent of its 2006 operating budget.

Commissioners turned over $853,383 in lodging excise tax receipts to the bureau, despite the fund’s projected shortfall, and that money will go a long way toward filling the CVB’s $2.88 million budget for the coming year.

Joseph Tomaselli, bureau board chairman, said occupancy rates for hotels and motels in the county are up compared with 2004.

“We think this trend will continue and we’re excited by that,” he said.

Occupancy through July of this year was 56.5 percent, up by 2.5 percent from the same period last year. Room bookings reached 60.4 percent locally last July, the highest monthly occupancy rate since 2001.

“We’re trying to grow our market outside of the state,” said Tomaselli in reference to convincing more national and regional groups to meet at DeVos Place.

Kent County has been channeling tax dollars collected from guests of hotels and motels in the county to the bureau since 2002; the amount commissioners awarded the CVB is the same as last year’s figure.

The tax dollars are generated by a 5 percent surcharge that is added to a guest’s lodging bill at every hotel and motel in the county. Kent County Fiscal Services Director Robert White said revenue from the levy was up by 7.2 percent to $3.03 million through the first nine months of the year compared to the same period last year.

But White added that the lodging tax fund is expected to be $1.6 million in the red by the end of the calendar year, and he again advised commissioners that they may have to cut the account’s expenditures before the reserve runs out.

The reserve, or fund balance, is expected to dwindle to about $4 million at the end of this year and leave enough money for two more years of deficits like this year’s. The lodging tax pays for the bonds that helped build DeVos Place ($4.57 million this year) and funds annual contributions to the CVB and John Ball Zoo ($435,000). Expenditures are expected to total $6 million, while revenue to the fund is anticipated to only reach $4.38 million.

The 2006 CVB budget is 2.7 percent higher than this year’s budget. An assessment from lodging owners will be worth $1.79 million to the bureau and will cover 62 percent of the budget. The city will contribute $50,000 to it, membership fees will bring the CVB almost $95,500, and management fees will add another $77,700 to the pot.    

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