Title
Update on Lodging Tax Advisory Committee Recommendations for 2027 Tourism Funding
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Receive an update on Lodging Tax Advisory Committee recommendations for 2027 tourism funding.
Report
Issue:
Whether to receive an update on the Lodging Tax Advisory Committee recommendations for 2027 tourism funding.
Staff Contact:
Amelia Layton, Senior Program Specialist, Community Development, 360.570.3808
Presenter(s):
Amelia Layton, Senior Program Specialist, Community Development
Background and Analysis:
Lodging Tax is collected as a 4% sales tax paid by the customer at hotels, motels, and short-term rentals including Airbnb, bed and breakfasts, RV parks, and other housing and lodging accommodations in Olympia. Lodging tax revenues must generally be used for tourism promotion, acquisition of tourism-related facilities, or operation of tourism-related facilities, including: tourism marketing, marketing and operations of special events and festivals designed to attract tourists, operations and capital expenditures of tourism-related facilities owned or operated by a municipality, and operations of tourism-related facilities owned or operated by nonprofit organizations.
The Lodging Tax Advisory Committee (LTAC) is required to include at least two representatives from businesses required to collect the lodging tax, at least two people involved in activities authorized to be funded by the lodging tax, and one elected official from the jurisdiction.
Historically, the LTAC makes recommendations on the use of 2% of the City’s Lodging Tax Fund, while the other 2% goes directly to the Washington Center for the Performing arts. In 2027, the full 4% of the collected sales tax is available through competitive funding, reviewed and recommended by the LTAC.
An open call for tourism services funded by the Olympia Lodging Tax Fund was advertised beginning, August 31, 2026. The application deadline was October 2, 2026. The LTAC members have reviewed and scored individual applications using the published set of review criteria outlined in the attached Application Guidelines.
Thirty-nine (39) applications were received requesting a total of $2,296,282.44 in funding. The City’s Finance team anticipates new Lodging Tax revenue for 2027 to be $1,050,000 and the estimated fund balance to start 2027 (also referred to as reserves) is estimated at $507,348.
The LTAC met twice to discuss applications and create the funding recommendations using average scores, application details, and weighing the potential impact on Olympia’s economic and lodging sectors.
The purpose of this agenda item is to provide the City Council with an update on the 2027 funding recommendation. Staff will share the recommendation, answer questions, and address any concerns before bringing a resolution authorizing the funding to the City Council for consideration at a future meeting.
Climate Analysis:
The recommendation does not have climate impacts. However, tourism inherently has a climate impact due to the requirement of travel.
Equity Analysis:
The inclusion of questions around accessibility considerations is the first step to encourage applicants and funded organizations to build their event/activity/facility to be inclusive to everyone’s participation. The addition of the non-discrimination language in the application indicates the seriousness of which the City of Olympia takes discrimination and that failure to comply will impact funding. Along with the inclusion of the applicant’s mission statement helps reviewers to ensure values of the organizations are aligned with the values of Olympia.
Neighborhood/Community Interests (if known):
Many community events and facilities receive funding from this program supporting participation from locals and tourists alike. For some events and facilities, the Lodging Tax funding is critical for their continued operations.
Financial Impact:
Lodging Tax fund 132 is a restricted resource to be used for tourism-related activities.
The LTAC recommends funding 24 of the 39 applicants totaling $1,138,265. This recommendation utilizes the full 2027 estimated revenue of $1,050,000 and draws $88,265 from the reserve.
Options:
1. Receive an update on Lodging Tax Advisory Committee recommendations for 2027 tourism funding.
2. Do not receive the update.
3. Receive the update at another time.
Attachments:
2027 Funding Recommendation
2027 Application Guildelines