Room tax shortfall impacts tourism plans

The Grafton Area Chamber of Commerce will have to scale back some of its projects for 2021 due to a shortfall in room tax revenue.     

Chamber Executive Director Pam King said Jan. 18 that the organization expects to receive $180,000 less than what it budgeted last year. She added she has not received fourth quarter numbers and expects the shortfall to be reduced by $30,000.

“Bottom line, Covid-19 is everywhere,” King said during her annual tourism report to the Grafton Village Board. “In January, we were in a fine place and things were status quo. Once Safer at Home hit, hotels were considered essential but there was no business or tourism travel.”

State law requires municipalities that collect a local room tax to forward 70% of that revenue to a tourism entity, such as the Chamber, to improve tourism assets.

The Chamber typically budgets its annual room tax revenue between $225,000 to $250,000, but increased its figures in 2020 to $280,000.

Prior to the pandemic, King was expecting a record year for the three Grafton hotels because of the Democratic National Convention in Milwaukee and the Ryder Cup in Haven. The Ryder Cup has been postponed until the end of September and the scope of the convention was significantly scaled back.

Since then, King said, business travel has picked up, but she doesn’t believe it will make up for the projected loss in room tax.

“Festivals are what our hotels rely on. Tourism has a huge impact on our room stays in the summer and early fall. We knew the impact from those events was going to be big and that’s why we budgeted the way we did,” she said.

King said the amount of money the Chamber receives will cover its costs, but it will have to cut back on advertising, a podcast series and funding a Blues Marker Park near the Paramount Plaza in downtown Grafton.

Although the pandemic impacted festivals and other activities, King remains positive.

“We thought our holiday events were going to be a total loss, and we believe it turned out to a huge win for our community,” she said.

“While it has not been a great tourism year for us, we think it has been a successful year because we were able to engage our community and build more pride in our community.”