Published on : Thursday, February 6, 2020
In last year, the city attracted about $12.4 million in tourism tax revenue. This was a 2% rise from 2018 and an all-time high that surpassed budget projections for the year.
Since 2014, Duluth has experienced constant growth in tourism tax dollars, though in recent years, the rate of that rise has dropped a bit. That’s the cause of celebration, not concern, for Mayor Emily Larson.
“Really large numbers in rates of growth, especially in an area that’s such a big part of our economy, is something I would be wary of,” she said. “I wouldn’t build a lot of budget changes around substantial growth. I wanted to make sure that we have staying power.”
Even though the annual growth rate is slow to some extent, the city’s levy, which consists of a tax on hotels and restaurants, attracted a record amount in 2019.
The city collects a 2.25% food and beverage tax and a 3% lodging tax, with 2.5% additional tax for hotels that have 30 rooms and above. It then funnels the money back into the local tourism industry.
Some tourism tax dollars are utilized for specific events, like the Duluth Entertainment Convention Center and Spirit Mountain ski hill, under longstanding agreements. Also, every year, local organizations can apply for a part of the tax money by making a case for the way their program or attraction will profit the tourism sector.
The numbers do not reflect inflation in the city, changes in hotel room inventory or increasing restaurant prices, meaning the revenue increases may not necessarily mean a larger number of visitors are coming to Duluth each year.
Tags: Duluth