The lodging tax has existed for years in Crookston, but other than when it was first established, it probably hasn’t been in the headlines more than it has over the past several months, when, in October, city council members and other officials questioned the amount of lodging tax revenue the Crookston Chamber was taking from the Convention & Visitors Bureau budget. The stories, fact boxes, photos and graphs on this page all dig into what the lodging tax is all about in Crookston. Share your thoughts on the lodging tax in a poll on the Times’ Facebook page.
When guests stay at a hotel or motel in Crookston, they may or may not notice a percentage of their room stay has a lodging tax built in. A lodging tax of 3 percent, to be exact. That tax was established in Crookston by ordinance in May 2000 and is state statute allowed. All four hotels/motels in Crookston, which consist of AmericInn Lodge & Suites, Cobblestone Hotel & Suites, Crookston Inn & Convention Center, and the Golf Terrace Motel, include the lodging tax on each stay’s bill if the total stay is less than 30 days.
The money collected then goes to the City of Crookston, who takes 5 percent, and the rest (95 percent) is distributed to the Convention & Visitor’s Bureau. The CVB then turns around and gives the Crookston Chamber of Commerce 15 percent plus itemized expenses.
For example, a $100 hotel stay generates $3 in lodging tax which goes to the city who keeps $0.15 and distributes $2.85 to the CVB, who then gives $0.4275 to the Chamber. It may not seem like a lot of money, but it adds up over time.
In 1983, the Minnesota Legislature passed the Local Option Tax. The law was passed so that 95 percent of the gross proceeds shall be used to fund a local convention or tourism bureau for the purpose of marketing and promoting the city or town as a tourist or convention center. The intent of the tax from its very inception and backed by several subsequent Attorney General opinions has clearly been to market and promote the destination to tourists. Hence, Crookston’s lodging tax.
City Finance Director Angel Weasner says that hotels send in money collected for the lodging tax monthly along with a form for how many were collected, not how many stays they had. She added that Crookston will soon be collecting from a fifth entity, the Air BnB lodging house that will open near Johnson Place and Widman Lane.
“We use the city’s portion to offset property taxes,” Weasner told the Times.
“There are ups and downs with the amount collected,” she added later. “There’s always a trend and summers we spike more.”
In 2017, the four Crookston hotels/motels took out $58,685.95 in lodging taxes from their total net room revenue of $1,955,630.87. Of the lodging taxes collected, $55,751.65 went to the CVB (which was down about $8K from the previous year’s collection) and $2,934.30 went to the city.
August 2017 was the busiest month for AmericInn and Cobblestone, June for the Golf Terrace Motel, and October for the Crookston Inn although December’s amounts for the Inn were not provided.
THE CVB SIDE
The Crookston CVB is made up of Executive Director Terri Heggie, who is also head of the Chamber, Tourism Coordinator Sandy Kegler, a nine-person board of directors, and five ex officios who govern the organization.
There were 19 events in 2016-17 that benefited from the CVB’s portion of the lodging tax with just over $21,000 given out in grants for marketing. Annual events such as Ice Buster Daze, Crookston Gun Show, Sugarbeet Museum’s Harvest Festival and Ox Cart Days received assistance for placing ads, getting posters printed, and for other marketing materials.
In early 2017, the CVB and the City of Crookston Parks & Recreation Department launched a collaboration focused on “sports tourism” to capitalize on amenities and assets within the community. The partnership hoped to maximize the use of local sports and recreational facilities, such as Crookston Sports Center, Highland Complex and tennis courts, and disc golf, to get visitors to stay at local lodging facilities therefore spending more time frequenting Crookston’s businesses. The CVB allocated funding in its 2017 budget to support the initiative through their “Grant Marketing Program,” which allocates marketing dollars to different entities, organizations and clubs that attract visitors to Crookston to stay overnight and spend their money here.
The following was submitted by Sandy Kegler of the Crookston Convention & Visitors Bureau:
A Convention and Visitor Bureau (CVB) is a not-for-profit organization supported by lodging room tax, government budget allocations, private membership or a combination of any or all three. It can also be named a destination marketing organization, tourist and convention commission, or other similar variations. The bureau in each city, county or region has four prime responsibilities:
• To encourage groups to hold meetings, conventions, events and tradeshows in the city or area it represents; to assist those groups with meeting/event preparations and while their meeting/event is in progress.
• To encourage tourists to visit and enjoy the historic, cultural and recreational opportunities the destination offers.
• To represent a specific destination and help the long-term development of communities through a travel and tourism strategy.
• To serve as a community’s marketing agency by promoting the city’s/county’s assets to visitors with the objective of increasing the economic impact to the local economy via the greenest and cleanest of economic strategies - people visiting, spending money and leaving the community intact. A CVB does not actually organize meetings/conventions/events. It does, however, help planners and visitors learn about the destination and area attractions and make the best possible use of all the services and facilities the destination has to offer.
For visitors, CVBs are like a key to the city. As an unbiased resource, CVBs can serve as a broker or an official point of contact for convention /meeting/event planners, tour operators and visitors. They assist planners with preparation and encourage business travelers and visitors alike to visit local historic, cultural and recreational attractions. Travel and tourism enhances the quality of life for a local community by providing jobs, bringing in tax dollars for improvement of services and infrastructure, and attracting facilities like restaurants, shops, festivals, and cultural and sporting venues that cater to both visitors and locals.