Page 194 - Tourism The International Business

9. The management of tourism

Exhibit 71: Taxes on meals can help fund
tourist projects. (Courtesy New Zealand Tourist
& Publicity Office.)

This method tends not to reflect inflation as would general fund allocations or a per cent of the room cost, but stays
at the same relative level except when new real estate property or new hotels, etc., are constructed.
General revenue funds from city, county, or region. This source of funding is probably used more widely than

might be expected. A number of local tourism promotion agencies, whether they be Chamber of Commerce or
other, receive allocations from the general funds of the city or the county, or in some cases, the state. Cities have
excellent opportunity to expand the general revenue funds through statutes. The advantage of a general allocation is
that the allocation can increase in size as the amount of funds coming into the city increases.
Some forms of the specifically earmarked general revenue funds in US states include:
• earmarking of funds, such as, in Rapid City, South Dakota where the state gasoline rebate funds go directly

to the tourism promotion agency;
• Nashville, Indiana, which has merchant's license tax of USD 50, which goes directly for tourism purposes.
Limitations of this type of financing would be that the city is normally reluctant to allocate general revenue
funds to agencies outside the city government framework over which they have little or no control. In some areas
this may not be legal.
Matching funds. A number of states have programs where local funds can be matched by state or regional
departments of tourism primarily for outside marketing and promotional efforts. Several states allocate funds to
regions, which in turn match funds with local tourism promotion agencies.

In those states where matching funds are not now available, it is sometimes extremely difficult to get the
legislature to pass legislation authorizing this arrangement, or to get them to fund the state department of tourism
at sufficient levels to allow funds to be available for this purpose. However, this provides an excellent incentive and
seems to provide a good deal of cooperation in the marketing area in those states which have it.

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