By Matt Robinson, Gallup’s Tourism & Marketing Manager
Dealing with change can be difficult, and informing the public about changes in government policy can sometimes be more of a challenge. This statement rings true for the latest updates to the Lodger’s Tax Grant Program guidelines approved by the Gallup City Council in October.
There has been a tremendous amount of confusion and some misinformation regarding the guideline updates, and for that, I accept responsibility for not doing a better job informing the public. Even with my background in journalism and as a public information officer for another local government, I have found throughout my career that it is difficult to comprehensively keep a community informed, especially when it comes to nuanced government regulations. For this confusion, I apologize and offer these words to hopefully clarify these matters.
For those unaware, the Lodger’s Tax Grant Program offers local event organizers the opportunity to apply for event support on a reimbursement-basis. The intent of this program is to provide events with support to advertise their event and make it a better experience for participants. The program is funded entirely by Lodger’s Tax, which is a 5% occupancy tax on local lodging establishments. In other words, for every $100 spent on a local hotel or motel, $5 is collected by the City to support the Tourism Office’s efforts, which includes the grant program.
The largest point of confusion, in my eyes, has been advertising within Gallup and McKinley County. The new guidelines stipulate that local advertising is prohibited unless (and this is a very important caveat) the event organizer can justify that advertising within Gallup and McKinley County will result in increased overnight stays after the event concludes. The advertising example I have shared — with the few people who have bothered to ask for assistance — is the lease of a billboard placement. A billboard could be located in Gallup and serve to help pull people off the interstate to an event. That justification is one sentence long and would be a compelling argument to receive support for a local advertisement.
There are plenty of other examples one could use to justify local advertising. The intent behind this guideline is to have event organizers plan more thoughtfully for the use of public funds to promote their events. Previously, the guidelines essentially allowed event organizers carte blanche for their requests, and program data shows that within the last three years, less than 30% of program funds were used to purchase advertising outside the community. This has a clear impact on our events, as other data has shown most events are not driving overnight stays in local lodging.
For the top 10 events between 2022 and 2024, the average Lodger’s Tax award was about $26,000, with an estimated return to the City of about $7,400. That return comes in the form of more Lodger’s Tax money as people stay in local hotels. This return on investment is less than 30%. I don’t expect a 100% return, but ask yourself, what business could sustain itself when it loses almost 70% of its investments on a continual basis?
In fairness, it should be acknowledged that events also contribute to gross receipts tax collections, and this has a positive impact on our community. However, gross receipts taxes do not replenish the Lodger’s Tax fund.
These guidelines are not intended to hurt anyone, especially our local businesses that do so much to support our events and community overall. The intent of these guidelines is to get more bang for the public’s buck, and to use Lodger’s Tax as it is designed – to increase tourism in our community. Our office is always available to assist event organizers with their applications to get the most support possible to use in effective ways that benefit not only the event, but community overall.
Change is hard, but our staff are here to support events and promote economic development through increased tourism. We can work through these changes together, and I feel we will come out on the other side in an even better position. With increased visitation comes increased Lodger’s Tax revenues, which will result in more support being available for local events.
Please reach out if you would like more information or have questions. I can be reached at 505-863-1227 or mrobinson@gallupnm.gov. We are here to help.
