Ocean City Council split on tourism advertising percentage | New

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A draft ordinance that increases Ocean City’s tourism department advertising by two-tenths of a percent over the next three years was presented to city council members on Monday, and although the first reading was approved, it was not unanimous.

Over the past few months, the department has seen several changes, including the introduction of a new director, Tom Perlozzo, and the approval of several new positions under his leadership as well as the realignment of a few departments, such as special events. .

Perlozzo’s plan includes an aggressive approach to changing people’s perceptions of the resort while targeting many different demographic groups – some who already love Ocean City and others, like Gen X and Millennials who can’t.

But another initiative of the director is to increase the budget of his department.

On November 30, three options to increase the tourism department’s budget were presented to council members in a working session, all involving the city’s 5% tourist tax – a charge applied to all rentals of rooms, from hotels to condominiums.

The room tax was increased from 4.5% to 5% on January 1, 2020. Prior to this increase, the room tax was last increased in 2008, when it went from 4 to 4.5 %.

Since the room tax increased in 2020, there has been some confusion over how the additional 0.5% should be distributed, according to Perlozzo, who saw it as a change. of politics.

Three suggestions were made during the working session. The first was to keep the percentage of collected room tax that could be used for advertising at 2% and to review the policy annually. The second option was to increase the 2% to 2.2% between 2023 and 2025 – in 2023 tourism would get 2%, 2.1% in 2024 and 2.2% in 2025. The third suggestion was to increase immediately the amount to 2.6%. .

Perlozzo told the board he prefers the second option, where the amount gradually increases. The second option, like the first, includes annual reviews.

The money, according to the ordinance, will cover expenses related to the promotion of destination marketing without deducting other tourism expenses such as salaries and office equipment.

What that would include, however, are things like advertising, marketing, promotions, sponsorships, research, subscriptions and commercial rights, conference fees, and promotion of special events.

If the 5 percent tax is increased, the ordinance says, 40 percent of the revenue generated by any future increase in the room tax rate would go to the advertising fund.

When the matter was discussed on November 30, City Councilor Peter Buas asked Perlozzo if he had a plan for the extra money he would get, and Perlozzo replied that he hadn’t. Buas then said he believed it was premature to vote on the ordinance without knowing what the plan was for the money.

Resort resident and former city councilor Vince Gisriel told council he had an issue with the remaining advertising funds carried over from year to year, saying the money should be returned to the general fund.

He also raised the issue of the 40% surplus for advertising, adding that this was going to be problematic as an excess of more than 5% would be difficult to determine.

Ocean City Hotel-Motel-Restaurant executive director Susan Jones told council she supported the ordinance, saying there would be no general fund without the publicity.

“I’m a little biased,” she said.

At Monday night’s meeting, council voted 4-2 to approve the first reading of the ordinance, based on the second option. Buas and Councilor Frank Knight voting against the change.

Knight told other board members he preferred to discuss option three because then all expenses would be charged to tourism. In the second option, salaries are taken from the general fund.

“Tourism should support itself,” Knight said. “I believe in financing tourism… I just don’t think that’s the way to do it. “

This story appears in the print version of Ocean City Today on December 10, 2021.


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