COVINGTON, Ky. (Aug. 9, 2017) — With Tuesday night’s unanimous approval of a 1 percent increase in Northern Kentucky’s hotel bed tax by the Boone County Fiscal Court, Northern Kentucky Convention and Visitors Bureau can begin moving forward with planning for the expansion of the Northern Kentucky Convention Center.
Boone County’s vote follows unanimous votes earlier this summer by the Campbell and Kenton fiscal courts. Under state statue, the region’s three county fiscal courts were required to approve the increase.
“The entire tourism industry in Northern Kentucky applauds the Boone County Fiscal Court for its unanimous vote – as well as the Kenton and Campbell County Fiscal Courts for their earlier unanimous votes – in support of the expansion of the Northern Kentucky Convention Center,” said Eric Summe, President and CEO of meetNKY/Northern Kentucky Convention and Visitors Bureau.
“This modest 1% increase in the region’s hotel tax will pay tremendous dividends through the development of a capital fund that will be used to expand the convention center in downtown Covington, which will create jobs, attract visitors to hotels, restaurants, businesses and attractions throughout the region and allow our center to remain competitive with other cities and regions,” Summe said. “The leadership of our elected county officials on this issue is a testament to vision, regionalism, economic development and cooperation.”
The increase will generate an estimated $1.2 million to $1.5 million annually, which will be used to seed a capital that will be used for expansion of the 204,000-square-foot Convention Center in downtown Covington. Summe said meetNKY will immediately begin working with Convention Center Executive Director Gretchen Landrum and her staff on initiating and funding a Center Tourism Master plan to assess and plan for an expanded center.
An expansion of the 204,000-square-foot Center will result in new jobs and spending, prevent the Center from losing business due to a lack of space and maintain its a competitive edge in the tourism industry, which contributes nearly $400 million to Northern Kentucky’s economy.
“Tourism is a major economic driver in our region,” Summe said. “This is an opportunity to further boost tourism in our area and generate jobs and economic development. Just like a business to reinvest to grow, Northern Kentucky will now reinvest into its tourism infrastructure to not only boost tourism, but to protect its revenue stream.”
Travel and tourism is a booming local industry, which in 2016 generated nearly $1.7 billion of total economic impact including $388 million spent by visitors to Boone, Kenton and Campbell counties.
In addition during 2016:
• meetNKY provided convention services to more than 143 groups, totaling 27,850 attendees.
• The average daily rate for hotel rooms rose 4.73% to $95.81 per room.
• $15 million of future convention business was booked into the regional hotels and convention center.
• Hotel occupancy levels hit their seventh consecutive year of growth, increasing 3.5% to 68.96 percent, ranking above the national average and all regional destination averages.
• Built in 1998, The Northern Kentucky Convention Center has exceeded expectations. Initial booking projections are up nearly 40 percent, its 2,500 events have generated $1 billion in economic impact and the Center directly supports 350 jobs.
“But a lack of space and increased competition is taking its toll on this economic driver,” Summe said. “And our competition continues to invest.”
The region has lost 246,000 hotel room nights and $115 million in revenue due to the lack of size at the Center. Meanwhile, elsewhere in Kentucky Louisville has expanded its convention center; Owensboro has recently opened a new center; Lexington is preparing to build a new center; Sharonville is considering an expansion of its center; and Paducah is contemplating a new center.
Even with the increase to 12.36% Northern Kentucky’s tax would still be lower than the hotel bed tax in Dayton, Ohio (13.3%), Lexington, Ky. (16.1%) Cleveland (16.5%), Indianapolis (17%), Louisville (17.1%), Cincinnati (17.5%) and Columbus (17.5%).
“And this is not a tax on our local residents,” Summe said. “It’s a tax paid by the out-of-town visitors who use and benefit from our hotels and convention center.”
Using a hotel bed tax increase to fund a convention center expansion is emerging as the new model in Kentucky. To pay for its new center, The City of Lexington received legislative approval to raise its hotel bed tax by 2.5 percent. The city will then use $10 million raised by the increase to pay back $60 million in upfront bond funding fronted by the State of Kentucky.
“A simple allocation from the federal and state government is no longer a reality,” Summe said. “The new model is how it was done in Lexington, and we are attempting to take a similar path.”