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Portland City Council considers proposal to keep Tourism Improvement District, fund economic recovery

News article

Lodging executives want to extend a 2 percent fee on overnight stays in Portland, which supports tourism marketing. They are also proposing a 1 percent surcharge to fuel Portland’s recovery from COVID-19 – and the resulting economic recession.

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Reeling from a global pandemic and economic recession, leaders in Portland’s tourism industry are proposing a path toward recovery: keeping the city’s Tourism Improvement District, and temporarily raising this fee on overnight stays to help bring back visitors, jobs and local spending.

City Council will host a public hearing March 3 on proposed changes to the tourism district, which collects a 2 percent fee on overnight stays at hotels and vacation rentals. Typically paid by guests, the fee is invested by Travel Portland to promote the Rose City as a destination.

Portland launched the Tourism Improvement District in 2012, at the request of the lodging industry, replicating a model that has been successful for many large cities. This year’s required sunset review presented an opportunity to assess how the district is working, and how it can play a role in Portland’s recovery.

Lodging leaders who serve on a subcommittee of Travel Portland’s board of directors recommended removing the need for future sunset reviews, and imposing an economic recovery surcharge of 1 percent with a review in 2026. If City Council approves the proposed changes to City code, their decision would temporarily raise the total fee to 3 percent.

“Portland’s comeback as a desirable tourism destination is critical to the economic viability and success of the city, region and state,” said Mike Daley, chair of the Travel Portland board and area general manager of Pollin Hotels. “The coming months have the potential to develop into the most competitive tourism landscape the industry has ever seen. This opportunity to increase Portland’s investment in tourism marketing communicates a commitment to investing in the future of our city, while also putting a significant number of Portlanders back to work in the hospitality industry as more visitors return.”

A year ago, Portland was a hot destination. Visitors filled hotels, ate at local restaurants and shopped at local stores -- supporting 37,000 jobs in the tourism industry. Service jobs provide a living wage and career growth opportunities for a diverse cross-section of Portlanders.

Industry leaders say the Tourism Improvement District played an important role in Portland’s success. By marketing Portland, this public-private partnership attracted visitors and fueled the economy. Out-of-town visitors spent $5.6 billion at local businesses in 2019, up from $3.9 billion in 2011.

“Working together, the lodging community and City leaders have demonstrated how tourism can benefit Portland,” Mayor Ted Wheeler said. “Now, it can be a catalyst for helping bring back people, energy, spending and jobs.”  

The global COVID-19 pandemic and economic recession delivered a crushing blow for tourism, as public health concerns and financial losses blunted travel. Revenue at Portland hotels has declined nearly 80 percent due to the pandemic. Daley, the chair of the Travel Portland Board, sums up the situation in one word: “devastating.”

Lodging industry leaders say national media coverage has created concerns about safety and livability in Portland – another hurdle to economic recovery. They see proposed changes to the Tourism Improvement District as part of the solution.

“The need has never been more urgent,” said Jeff Miller, president and CEO of Travel Portland. “The tourism industry is perfectly positioned to contribute directly to the economic future of the city by building tourism demand that will result in job creation and visitor spending as the market recovers from the impacts of COVID-19. These funds will be instrumental to rebuilding Portland’s reputation and marketing the city in a landscape where every destination will be competing for the attention of potential visitors.”