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Commission backs FY25-26 tourism fund budget after conservative bed-tax forecast
Summary
The commission recommended Scottsdale's proposed FY25-26 Tourism Development Fund budget after staff presented a conservative bed-tax forecast, proposed increases to destination marketing allocations, and several one-time funding requests including Scottsdale Museum of the West support.
The Scottsdale Tourism Development Commission voted to recommend the proposed fiscal year 2025-26 Tourism Development Fund budget after staff presented revenue forecasts and a package of program and one-time funding proposals.
The budget analyst who presented the proposal told commissioners "the starting point for a lot of what we do with the tourism budget, is really focused on the bed tax" and described adjustments to the current-year forecast and the proposed revenue assumptions for FY25-26. Staff raised the current-year forecast from an adopted $31,500,000 toward a $33,800,000 estimate and proposed a conservative FY25-26 bed-tax forecast around $33,000,000.
The proposed budget aligns destination-marketing contract payments to forecasted revenues (the presentation noted the 45 percent allocation will rise with higher receipts) and adjusts other policy percentages such as the 12 percent general-fund transfer. Staff also highlighted several requested commitments included in the proposed budget: a Scottsdale Arts financial participation placeholder (presentation referenced roughly $393,000 requested and a placeholder of approximately $292,000 for an anticipated 2.5 percent increase), $100,000 for a Scottsdale Arts strategic plan, $600,000 directed to the Scottsdale Museum of the West in FY25-26 (with another $600,000 planned for FY26-27), $75,000 for Old Town entertainment, and $63,000 for wayfinding and signage.
Staff further proposed an internal destination-marketing increase (presentation cited roughly $4,300,000) and called out line items such as $316,000 for advertising and marketing, $190,000 for WestWorld marketing, $10,000 for Scottsdale Stadium marketing, $200,000 for regional event funding requests and $75,000 for an Old Town matching marketing program. The proposed budget also includes moving a position to tourism to create an "Old Town specialist" full-time equivalent to support outreach and requests.
During discussion commissioners praised the presentation's conservative approach to forecasting and asked about the short-term rental (STR) program line, which the presenter explained was reduced because certain enforcement personnel and commodities were reallocated across funding sources after recent changes to local and state funding streams (the presenter cited Proposition 207 Smart and Safe Arizona funds and a local park-and-preserve tax, referenced in the meeting as Proposition 490, as factors in funding shifts). Staff said total transfers out decreased by roughly $5,000,000 compared with the prior year as the department refocused on tourism drivers.
Following discussion, a commissioner moved and a second was given for a recommendation to forward the proposed FY25-26 Tourism Development Fund budget; the commission voted in favor.
