Attractions benefit from rise in LART revenue

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Colorado Springs tourist attractions will receive more money from the city, as lodging taxes increase for the second year in a row, according to Shelly Morgan, sales tax supervisor for Colorado Springs.
Known as LART, or Lodging and Rental Tax, the revenue consists of a 2 percent hotel tax and a 1 percent rental car tax. The money is collected by the city and is used to maintain and upgrade attractions such as Pikes Peak and other city attractions, Morgan said.
After three years of decline, the tax revenue is about 3.3 percent higher than for the same period last year. Overall, the LART tax increased 8.4 percent in 2004.
“Revenue is up through September,” Morgan said. “We’ve collected $2,492,616 in lodging tax; last year at this time we only collected $2,430,988.”
Revenue for 2005 is projected to reach $3,652,309, according to information from the city. Colorado Springs is experiencing a shift back to pre-9/11 visitor levels, said Jim Cassidy, chief financial officer for Experience Colorado Spring at Pikes Peak, formerly the Colorado Springs Convention and Visitors’ Bureau. The 2004 increase ended a three-year slump in tourism revenues.
“The big boost in 2004 was because we had more travelers,” he said. “We took a hit because of the terrorist attacks, but now people are ready to travel again, they feel safer, more confident.”
But the increase in dollars in 2005 didn’t translate into more visitors, as the occupancy rate has held steady at an average of 60 percent during the past four years, he said. Instead, the increase reflects higher room rates in Colorado Springs.
“The average room rate in the city is $73, and that’s a slight increase,” he said. “When we started getting more demand, people started to be willing to pay a little more for the rooms.”
Also known as the “bed and car tax,” the money is returned to the community in an effort to bring more visitors to Colorado Springs.
“It’s defined very loosely,” Cassidy said. “A large part of it for the past few years has gone to paving Pikes Peak Highway. We receive two-thirds of it, under contract with the city, so an increase is good for us; it means we have more money to do our job.”
In the upcoming 2006 budget, which is not yet final, Experience Colorado Springs is expected to receive $2,448,396 from the city. A transfer in the amount of $404,198 is planned for the general fund for other tourist-related expenses, such as the Pioneer’s Museum, Starsmore Discovery Center, Rockledge Ranch and the Garden of the Gods Visitor Center.
The city also uses the money to maintain regional parks such as North Cheyenne Canyon, Palmer Park and the North Slope Recreation Area.
A portion of LART goes to Pikes Peak to assist with an erosion and sedimentation project that is the result of a consent decree entered into because of litigation with the Sierra Club. Under the terms of the agreement, Pikes Peak will receive $800,000 to improve erosion control on the mountain.
About 78 percent of Experience Colorado Spring’s budget comes from the lodging tax, Cassidy said. The rest comes from members who receive marketing benefits for their membership fee.
Most of the organization’s roughly $3 million budget goes to advertising and marketing efforts on behalf of Colorado Springs and Pikes Peak. The group markets the city to national organizations for nonprofit executives and other groups that need meeting and hotel space. In addition, Experience Colorado Springs coordinates a national print advertising campaign to attract visitors to the area.
“We have to compete with the rest of Colorado and other cities our size in the West, Albuquerque and Tucson, for example,” he said. “And we are competing; we’re definitely getting the advertising message out there.”