How Are Convention Bureaus Funded?

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Traditionally, convention
and visitors bureaus are not for profit organizations that rely on a mix of funding sources for their operations. For many convention bureaus, membership fees are a major component of funding, though this might not be the only funding source. However, it is a mistaken assumption that convention
and visitors bureaus rely on service fees from event planners
and others; very few convention
and visitors bureaus charge service fees,
and those that do usually only assess fees for extraordinary services, such as company-unique marketing materials. Convention bureaus benefit the local community, local
and visiting businesses, residents, visitors
and travelers, all of which may fund the convention bureau in different ways.

Convention Bureau Funding Source #1: Hospitality Taxes

Hospitality taxes are a main source of operating funds for convention bureaus. Convention bureaus do not assess or determine area hospitality taxes, but rather may receive a certain percentage of hospitality taxes set
and collected by the local government. This type of tax is most commonly assessed for goods
and services at hotels, event venues,
and restaurants,
and may also be seen on receipts from bars, car rental agencies, or entertainment such as concerts. The hospitality tax may be levied as a percentage, a flat rate, or both; in some areas, it is assessed as a luxury tax, or if limited only to hotels, an occupancy tax.

Hospitality taxes benefit a community by providing funding to the convention bureau
and other tourist
and travel services. This funding allows services to exp
and their offerings, bringing in more business to local companies, which in turn spreads the tax liability by encouraging more tourism as services improve. Thus, the local community, residents,
and visitors receive continually greater benefits
and opportunities.

Convention Bureau Funding Source #2: Membership Fees

Most convention bureaus offer schedules of membership to local businesses
and service providers at varying levels
and costs. This is the second largest source of funding for many convention bureaus. In return for membership dues, which are usually assessed annually, members receive a variety of benefits, including:

  • Inclusion on promotional materials distributed by the convention bureau, such as planning guides
    and calendars
  • Early notice of planned meetings, conventions,
    and activities of interest to businesses
  • Marketing support through distribution of business flyers
    and other materials at the convention bureau
    and relevant events
  • Business to business networking meetings
    and opportunities

Just as it is a frequent misconception that convention bureaus only specialize in large events (they do, in fact, work with all sizes of events