||| BY MATTHEW GILBERT, theORCASONIAN OP-ED REPORTER |||


The San Juan Islands Visitors Bureau (SJIVB) contract is up for renewal at the end of this calendar year, and discussion has centered around the question of whether it should be renewed, if so under what conditions, and if not, how should the county use its lodging tax revenue – historically (and legally) earmarked for tourism promotion. On Tuesday, Brandon Andrews, San Juan Parks and Fairs director, described for the County Council how other counties have handled their “destination marketing” function, featuring a chart that showed the population size of each county and the size of their marketing budgets. Not surprisingly, San Juan’s per capita expenditure dwarfs most others. [See the meeting video here HERE, starting at about the one-hour mark.]

The issue of this renewal has galvanized two long-opposing forces, summarized by the following points of view. The first is represented in a public comment by Orcas Island resident Alexandra Gayek, the second by the Bureau itself in a letter it sent to members as a template for lobbying the Council:

Alexandra Gayek:
I urge you to NOT renew the San Juan Islands Visitors Bureau contract, and NOT replace it . . . with any other mechanism to continue promoting tourism at this time. It is irresponsible to continue to promote tourism under the current conditions. What is responsible and needed is to use lodging tax revenue (and/or make other financial resources available) to measure and mitigate the negative ecological, resource, infrastructure, health, financial and community well-being costs of the high amount of visitation we already experience, establish limits on future visitation, and plan how to enforce those limits BEFORE continuing or making any decision to further promote it.

SJIVB:
My business/non-profit is proud to be a member of the San Juan Islands Visitors Bureau. Their year-round destination marketing and stewardship messaging is very important to sustaining my business/non-profit, year over year, and especially in light of the negative ferry news since last year. Visitor dollars are necessary to my business/non-profit, and we would not be able to survive on residents alone. Their “umbrella” marketing allows the San Juans – and island businesses/non-profits – to be competitive with surrounding destinations and retain market share. My business/non-profit supports cooperative strategic planning between the County and Visitors Bureau to help ensure that tourism is both economically and environmentally sustainable within our island communities. The tourism industry is currently the County’s “bread and butter,” and the Visitors Bureau helps keep small businesses like restaurants and retail shops open for all to enjoy.

During the discussion, Council member Jane Fuller echoed Gayek’s concerns when acknowledging “the volume of correspondence that Council has received (for years) against further promotion,” and that if the county is to commit to a multi-year contract, a portion of available funds should be used for stewardship.

[To that point, Gayek also reported on a discussion she had with State Senator Liz Lovelett about the possibility of revising the state lodging tax law “to allow tax funds to be used to measure and mitigate the environmental impacts of tourism. She was very discouraging about this, saying that there’s a force in other counties … whenever anyone tries to get close to changing that law.”]

Cindy Wolf: “There is clearly a need for some kind of balance . . . Philosophically, how do we strike a balance instead of trying to stimulate year-to-year growth?”

Fuller: “We still don’t have a tourism plan. A lot of work went into the Destination Marketing Plan, but nothing has been decided.”

Andrews felt that the VB had a unique role and structure that would be hard to replace, did not feel the marketing function should be absorbed by the county or re-opened via an RFP (request for proposal), and recommended that the contract should be renewed for a minimum of three years. In the end, as you will see in the recently posted press release, the Council – whose role is to suggest and not decide (a power that resides with the Lodging Tax Advisory Committee) – essentially followed Andrews’ recommendations while endorsing an adjusted fee structure, a focus on supporting the island economy during the shoulder and off-seasons, and the addition of performance metrics. They did strike a reference to “tourist expansion” in the current contract language, although that is hardly consistent with adding an emphasis on off-season promotions.

Data Says . . .?
In the shadows of this ongoing debate lurk some interesting numbers. Not surprisingly, overall lodging tax revenue has steadily declined from the post-pandemic frenzy of 2021. For the Nov. – April period (Q1 and Q2 as tracked by the county assessor – Q3 data won’t be available until the Fall), the three-year decline has been most pronounced on San Juan (approx. 50%), while on Orcas the drop has been much more modest (down 14%). That said, the story (so far) in 2024 compared to last year is quite different: down 16% on Orcas through April and up on both San Juan and Lopez. Dragged down by Orcas, the drop for the county is 8%, even as 2024 ferry traffic has been tracking closely to 2023 numbers (although Labor Day traffic was up 10% from last year).

Sales tax income tells quite a different tale. Despite lodging taxes having declined since 2021, sales tax revenue has steadily gone up: 16.5% overall and 3% compared to the same period last year. [To put these figures into perspective, year-to-date 2024 lodging tax revenue is 12.5% the size of sales tax revenue.] When you put the two together, the combined revenues have gone up 9% from what at the time was a record year for lodging and sales taxes.

If tourist traffic as measured by lodging revenue has declined, what explains the consistent rise in sales tax numbers? The most logical answer is residential growth and everything that goes with it, not least of which is construction activity (though local category tax breakouts aren’t available). There were 898 building permits issued in 2022 (including new residential, remodels, and additions), 594 in 2023, and around 300 so far in 2024.

The latest Comp Plan projection estimates that the population of the county will grow from approximately 17,000 in 2025 to about 19,000 by 2035 – a 12% increase. On Orcas, that number is expected to reach 6,400 in 2035 from 5,800 currently. And while it’s too early to tell if the tourism landscape is reshaping itself around ferry uncertainties and other global forces, one thing is clear: As the number of residents goes up, so too does the number of visitors.

Which Signs to Believe
Is all of this an argument in favor of, or against, the pursuit of more tourist dollars? It seems clear that those concerned with island-wide impacts, both human and non-, shouldn’t put all their grievances on the shoulders of visitors. But with population growth – and overall county revenue – on a steady rise, putting growing pressure on island resources and quality of life, the argument for more visitors doesn’t quite hold water either.

I posed these issues to both Orcas Island candidates seeking a place this Fall on the County Council: Justin Paulsen and Rick Hughes. I had intended to include their thoughts in this piece, but their responses were substantial, and will be the subject of Part 2 . . .


 

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