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Scottsdale City Council moves forward with defined terms of destination marketing agreement

Photo of the Seal of the City of Scottsdale
The seal of the city of Scottsdale. (Photos: Arianna Grainey/
Experience Scottsdale sees 45% of bed tax remits in new 5-year program
By Terrance Thornton | Digital Free Press

Scottsdale City Council approved its annual destination marketing agreement with Experience Scottsdale but not without first hearing from one resident who voiced concerns over a 5% change in where the money goes.

“When we did that vote on the sales tax increase it was with the understanding the management company would get a full 50% of the revenues from the bed tax,” Scottsdale resident Diana Smith said in a June 22 phone interview with the Arizona Digital Free Press.

“The point that I was making is that citizens thought the emphasis and the marketing material and ballot language said, ‘50% for destination marketing’ … they were very specific about how Experience Scottsdale will have to perform to meet the agreement, but there is no explanation of the 5% — who will govern it — and there is no explanation when it can used.”

The contract, which comes to a total of $11,446,664 in bed tax dollars, was approved by the local governing board Tuesday, June 21, at City Hall, 3939 N. Drinkwater Blvd.

“Experience Scottsdale anticipates its total FY 2022-23 operating revenue budget to be $17,232,164 of which the city agreement and 50% of the Fiesta Bowl contract amount is $11,446,664,” said Karen Churchard, Scottsdale Tourism and Events director, in her report to City Council.

“The city’s FY 2022-23 adopted operating budget forecasts bed tax revenue at $25,000,000. Forty-five percent of the forecast total revenue derived from the bed tax is paid to Experience Scottsdale to execute their agreement at $11,250,000 and the remaining 5% of destination marketing funds at $1,250,000 will be allocated to the city’s newly created destination marketing reserve fund.”

Since 1977 Scottsdale has maintained a public-private partnership funded by what city leaders call “transient occupancy tax” or “bed tax” providing destination marketing services for both Scottsdale and immediate region.

Since July 1, 2010, Scottsdale has been imposing a bed tax of 5% with remits of those rates funneling into the Tourism Development Fund of which 50% is used for destination marketing activities.

“How will those dollars be used? Who will qualify for those designated funds?” she asked. “It is the how, when and why? Who has final authority and how do you get that?”

Performance standards reported

The terms of success for the contract are agreed to by city officials and Experience Scottsdale representatives. Those terms include:

  • The organization’s overall budget;
  • Prior year performance;
  • Priority areas where revenue will be deployed in the coming year, economic and business cycles; and
  • The capacity of Experience Scottsdale’s staff and resources.

There are now 19 performance metrics to be deployed and monitored at City Hall. Within the 19 performance standards, are five that are specific to businesses, entities and areas within municipal limits:

  • Number of media placements that include entities within Scottsdale city limits.
  • Number of travel trade professionals trained about Scottsdale specifically via product training seminars.
  • Number of convention sales leads for properties within Scottsdale city limits.
  • Number of meetings booked into properties within Scottsdale city limits.
  • Number of estimated room nights from meetings booked into properties within Scottsdale city limits.

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