NEW ALBANY — The mission of SoIN Tourism, formerly known as the Clark-Floyd Counties Convention & Tourism Bureau, is to promote Southern Indiana and attract more visitors to Clark and Floyd counties. The more people visit the area, the more money they spend at local businesses.
But in order to attract travelers, a strong marketing plan is needed to drive more visitors to local attractions and hotels. And that takes money.
The Floyd County Council helped that cause out Tuesday by passing an ordinance to increase the innkeeper's tax from 4 percent to 6 percent. The Clark County Council is still considering the increase which, if passed, will take effect Dec. 1.
"Three-fourths of our budget is dedicated to marketing," SoIN Executive Director Jim Epperson said of how the money is used.
Residents of Floyd and Clark counties will not be impacted by the tax increase, only those staying in hotels. It's really more of a user fee.
"All it can do is help our businesses," Councilman Adam Roberts said. "It's a win-win. I think the citizens of Floyd County and small businesses in the county need to support this."
Both Roberts and Brad Striegel, council vice president, said they wanted to make sure residents understood this was not an increase they would see on property tax bills or payroll taxes. Roberts said he took several calls from people thinking this would be a tax increase.
"It's not an increase in taxes," Striegel said.
The tax has not been increased since 1984 and is one of the lowest in the state. Indianapolis by comparison has a 10 percent innkeeper's tax and Evansville's is 8 percent.
When the Clark-Floyd Counties Convention & Tourism Bureau was created in 1976, a tax rate of 3 percent was established, and it went up to 4 percent in 1984. But it has stayed the same for the last 35 years.
While 75 percent of the tax increase will go toward marketing, the remaining 25 percent will go into the capital projects fund.
Both Clark and Floyd counties are considering the same ordinance. The Floyd County Council approved it with unanimous approval.
The 6 percent tax will put the two counties in the middle of the innkeeper's tax rate throughout the state, and it will remain cheaper than Louisville's tax.
There are 61 counties who charge a 5 percent tax and five charge 6 percent once the Clark County Council passes the ordinance. There is no timetable when that will happen.
According to a SoIN document, the organization is "not competitively funded in comparison to those in similar markets" since the innkeeper's tax is lower "than most Indiana destinations of comparable size."
A 2016 report by Rockport Analytics spelled out the economic impact of tourism on the area. The report states that visitors spent $310 million in 2016 and that 6 percent of all jobs in the region are supported by tourism.
Southern Indiana hotels did feel the impact of bridge construction and the closure of the Kentucky International Convention Center, according to the SoIN document. Hotel room demand in 2017 was down 8.7 percent. But the demand seems to be on the rise with the construction completed, convention center now open and more hotels being built in both counties.