Mayor Larson Puts Duluth’s Tourism Tax Revenue Under Microscope

Tourism-Related Entities Asked To Prove Successful Use Of Tourism Tax Dollars

DULUTH, Minn. – With the city of Duluth facing $2.1 million in cuts for 2018, Mayor Emily Larson is looking at every single dollar that flows in and out of the city. That includes a deeper look into the lucrative revenue stream of tourism tax dollars – a stream that Larson says doesn’t have a clear story to tell – at least right now, as FOX 21’s Dan Hanger reports.

Hotel, motel, food and beverage tourism tax revenue accounts for $11.6 million every year.

“It’s a lot of money. It’s important to people. It’s important to sustain this industry,” Larson said.

But Larson admits there’s never been any formal annual reports to show how tourism-driven attractions like Spirit Mountain, the DECC, Lake Superior Zoo and the Aquarium are using the revenue.

“I want to be able to tell our tourism story because right now I really don’t have a good narrative about what we are doing. And I don’t have a good sense of accountability for the public,” Larson explained.

And it goes even further to the state, which restricts Duluth’s tourism tax dollars to be used solely to benefit the tourism industry – not locals.

“As we are talking about tight budgets and difficult budgets and hard financial choices — that we just kind of shine a light on all the financial decisions we get to make as a city,” Larson said.

That light will now require tourism organizations to provide a 2017 report to Mayor Larson about their use of tourism tax dollars.  Check out a breakdown of 2017 allocated funds here: 2016 Resolution for Distribution Estimated 2017 Tourism Taxes

“What did you do? What was the impact? What did it help you leverage? Who were you visitors?” Larson said.

Larson is also asking for those entities to apply for funds in 2018 while answering about a dozen questions (see below for the list of questions).

“How are they capturing information  about  tourism? How do they know they are serving tourists? What is the data they collect?”

And through that data, Mayor Larson hopes to not only more accurately allocate tourism tax dollars to entities, but also learn a whole lot more about the visitors who help keep the city alive.

“Really know more about who our tourists are, and I think we can use that data to help expand our marketing efforts and to help expand new offerings to really appeal to who it is — to who supports this industry,” Larson said.

Before the end of the year, the city council will publicly discuss and then vote on the allocation of tourism tax revenue for 2018.

2017 Tourism Tax Allocation Report


Lead Contact:

1.       What is the mission of your organization?

2.       What was your Tourism Tax allocation for 2017 and their applied use?  Please be specific.

3.       Total organizational budget (please attached adopted 2017 budget).

4.       What other dollars were you able to bring into your organization for 2017 as a result of the Tourism Tax allocation?

5.       How many tourists and non-residents have you served so far this year?

6.       How to do you measure residency?

7.       What percentage of visitors to your organization are from Duluth?

8.       What activities have you done in 2017, or plan to do by the end of 2017, in partnership with other area tourism entities? Please be specific.  (This can include events, advertising, shared ticketing, etc.).

9.       What city services have been required in 2017 to support your organization?  Please include public safety and emergency management staffing or response, any shared staffing, programming or property considerations.

10.   What additional City Funds (non-tourism tax) were invested in your organization during 2017?

11.   What else would you like to share about your efforts, successes or challenges so far for 2017?

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