Providence tourism district backed by key city panel

PROVIDENCE City Council will vote Dec. 15 on the proposed Providence Tourism Improvement District, which would use 2% of future lodging revenue from hotels such as the Hotel Providence toward an expansion of marketing efforts./ PBN FILE PHOTO / JAMES BESSETTE

PROVIDENCE – The city finance committee on Monday unanimously supported creation of a Providence Tourism Improvement District to generate additional revenue to boost the hospitality industry.

If approved by the City Council, which is scheduled to vote on the measure Dec. 15, the district could launch as early as Feb. 1 and would dedicate 2% of gross hotel room revenue to a fund managed by a committee of hotel owners and the Providence Warwick Convention & Visitors Bureau.

The 2% assessment on all lodging revenue would be collected by the city and only apply to hotels with 50 or more rooms “existing and in the future” within the city limits. There are currently 14 hotels within this category, comprising of 2,950 rooms.

The initiative was made possible through the passage of the Tourism Improvement Districts Act by the General Assembly back in May. The law allows for the creation of special tourism districts in all Rhode Island municipalities “upon submission of a successful petition of the assessed business owners located within the boundaries of the district,” and requires 60% of impacted business owners to sign on in support. A petition circulated among hotels in Providence was signed by more than 90% of hotels.

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PWCVB has launched an identical campaign in Warwick that is still in its planning stages. President and CEO Kristen Adamo told the committee the bureau’s annual budget, which is funded mostly by taxes on hotel room revenue, has decreased from $4.2 million in 2019 to $2.8 million in the current fiscal year.

“I think we have really proved our resiliency and our importance to the city of Providence,” she said.

There are currently 194 tourism districts in the country, many of which have annual budgets in the tens-of-millions of dollars, which according to Adamo, has put the PWCVB at a disadvantage in the tourism and events booking market against competing major cities.

The city’s lodging industry, which is still hampered by staffing and supply-chain challenges, has been slower to recover from the pandemic in comparison to more leisure-driven markets in the state. Adamo said Rhode Island has lost $78 million in direct spending revenue because of cancelled events and hotel room bookings since 2019.

“And unfortunately, the bulk of that loss came from Providence,” said Adamo. “Quite frankly, we simply cannot [currently] compete at the level that we need to.”

The city’s chief financial officer, Lawrence Mancini, said the PTID has the full support of the administration.

“We are prepared to administer this when it comes online,” he said.

According to the budget outline accompanying the resolution, PTID first-year revenue would be approximately $1.6 million, with 90% going toward advertising, marketing, sales, and opportunity funding. The city would retain a 3% jurisdiction administrative fee, projected to be $49,372 in the first year.

Before the committee vote, Councilwoman and Finance Chair Jo-Ann Ryan commended the partnership between hotel operators and the PWCVB.

“Pairing you with them is a recipe for success,” she said.

(Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com)

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