The San Diego Tourism Marketing District (SDTMD) was established in 2008 to fund effective and competitive destination marketing for the City of San Diego by bringing visitors into hotels and assessing the hotels a percentage of the room fee.
Prior to 2008, a majority of the tourism marketing efforts were paid for by San Diego’s Transient Occupancy Tax (TOT) revenues. The TOT was established by the San Diego City Council in 1964 “solely for the purpose of promoting the City of San Diego.” However, with costs for city services increasing, various city councils diverted most of the TOT funding for other City programs. By 2007, only six percent of the TOT funds were allocated for tourism promotion.
Lodging business owners with 70 or more rooms were assessed a percentage of each room rental to be collected by the city in order to fund marketing efforts, tourism promotion activities and special events and programs. The SDTMD uses 80 percent of its funding to support the San Diego Tourism Authority (SDTA) in the objective of driving the city’s tourism promotion, which is key to SDTA’s efforts to win market share and showcase San Diego as a diverse tourism location.
The formation of the SDTMD and its tourism promotion-only fund, freed up TOT dollars for city services without creating new taxes for city residents or extraneous government spending. The City of San Diego recorded TOT collection revenues of $186 million for FY2015, allowing the city to spend more on general fund priorities such as the planning, construction, maintenance and operation of tourist–related cultural, recreational and convention facilities, as well as roads, police, fire, parks and other city services.
After a successful five-year pilot program following 2008, the San Diego City Council voted to renew the district for another thirty-nine and one half years demonstrating their support of the highly-successful SDTMD program. Additionally, the City Council approved the second five-year operating agreement between the City of San Diego and the SDTMD to administer the collection and funding process.
Under the leadership of the SDTMD, the region has also realized the following key economic impact achievements as of FY2015:
- $16.2 billion new dollars generated
- 173,000 tourism-related jobs supported
- $9.6 billion in total visitor spending
- 9.5 million hotel visitors
- 17 million overnight visitors to San Diego (increasing overnight lodging revenue by almost 10 percent)
The San Diego lodging industry continues to enjoy a record period, which is the overarching mission of the San Diego Tourism Marketing District.