Originally envisioned to mitigate the harsh impacts COVID-19, the Code of Virginia was amended in June 2021 by adding in Chapter 24 of Title 15.2 (Article 3), consisting of sections numbered 15.2-2413.1 through 15.2-2413.11. This authorized any locality to:
- Create a local Tourism Improvement District (TID) plan;
- Contract with a nonprofit entity to administer the activities and improvements;
- Establish fees charged to businesses; and
- Fund tourism promotion activities
TIDs are a hospitality-specific model of Business Improvement Districts (BID) and/or Special Assessment Districts. They can overlap with, but do not share, mandates, legal or program funding requirements, or benefits with Tourism Zones and Special Assessment Districts.
TIDs use special benefit assessments to raise revenue in the form of fees, rather than using sale or property tax collection vehicles. TIDs may use revenues for:
- Destination marketing and tourism promotion;
- Capital improvements;
- Public programming;
- Workforce and DEI training;
- Sales site visits and events;
- Group meeting incentives, bid fees, commissions, and rebates; and
- Administrative expenses associated with managing the TID
Funds raised through these assessments cannot be diverted into other government programs and can only be spent on programs that benefit those who pay into the district, which in most cases are hotels.
The mission of a TID is to promote and improve tourism inside its designated boundaries, which can mirror a Main Street District’s boundaries. This would likely work best if there’s a critical mass of payor businesses inside the boundary that can be assessed fees, such as hotels, restaurants, attractions, or amenities. A group of payor businesses has oversight as to how the funds are spent, as either an independent nonprofit board or as a steering committee of an existing nonprofit organization. Activities of a TID may include print and internet advertising, website operations, visitor services, sales lead generation and other significant sales and marketing programs that benefit the payors by increasing demand for visitation.
TIDs are most effective when initiated by tourism businesses inside the proposed district. These businesses:
- Garner TID support from local peer businesses (hotels, restaurants, attractions, etc.);
- Collaborate with the locality to develop TID boundaries, eligibility, requirements and plan; and
- Petition the locality (or localities) to create and adopt the TID plan
Localities that include part or all of the TID bounded area are required to:
- Hold public hearings to review and adopt TID plan;
- Approve the petition to create a TID program; and
- Collect fees and remit them to the TID Governing Board
Special Note: Multiple localities can form a regional TID.
The TID Governing Board:
- Adopts the TID plan;
- Directs funds received from participating businesses;
- Executes the adopted TID plan; and
- Oversees any changes to the TID plan
The first and only example of a TID in Virginia has been organized under Greater Richmond Region Tourism, the Destination Marketing Organization for that region. This regional TID includes businesses and local governments across five jurisdictions. The Richmond Region TID is expected to generate as much as $8.2 million annually to support the promotion of the region as a leisure, conference and sports tourism destination!
Image Credit: Staunton Virginia
Image Credit: Northern Virginia
Image Credit: Richmond TID
Virginia Main Street 