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Nov 25, 2009 8:06 PM by Andy Koen

Tourism revenue at risk under new city budget

Don Wick and his wife Shirley have owned the Old Town Bed and Breakfast in Old Colorado City for the last 6 years.  They easily admit, this year has been a tough one financially.

"Business, this year has been in the tank," Wick said.

As small business owners, they rely on the convention and visitors bureau, Experience Colorado Springs, to promote the Pikes Peak Region nationally.

"I can't target my market to high velocity, high volume centers that the convention and visitors bureau can and always been able to focus on."

Like many local B&B owners, the Wick's are worried that City Council's decision to keep an extra $600,000 in Lodgers and Automobile Rental Taxes (LART) next year will hurt their industry. 

"It seems to me to be fairly nearsighted and narrow minded," Wick said.

LART taxes are paid by tourists on their hotel and rental car bills.  Historically, the city has kept a third of the tax revenue and the CVB has kept the rest. 

Tuesday's vote changed the formula to increase the city's share to half, with the provision that the money be spent on parks, museums and other tourism related budget items.

Visitors Bureau CEO Jerry Sullivan says the city is constraining its tourism revenue with this decision.

"Every 1 dollar given to this organization from the lodging tax brings back 90 dollars," Sullivan said. 

"That's a pretty marvelous investment."

In fact, Sullivan estimates the Colorado Springs economy could lose as much as $20 million in tourism revenue next year as a result of the cuts.

Karen Cullen owner of the 1892 Victoria's Keep Bed and Breakfast in Manitou Springs says small businesses like hers will be hit the hardest by that loss.

"We just don't have the market budgets that larger hotel chains have," she said.

Sullivan hopes to limit budget cuts at the visitors bureau just the marketing budget, but he is also considering layoffs and limiting hours at the visitors center next summer.

Voters approved the lodgers and automobile rental tax in 1980.

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