Huntington Beach is looking to increase tourism advertising as cities around the county consider what the future of tourism bureaus should look like in the fallout of a probe from the state auditor into Anaheim’s tourism advertising agency. 

Orange County’s tourism bureaus are funded through a special self-imposed tax by hoteliers on hotel rooms and short term rentals paid for by visitors from out of town, not from the city’s general fund. 

Those tax dollars are collected by the city and then handed off to a tourism bureau, which is generally a nonprofit separate from the city government that receives marginal oversight. 

The theory is that using that money to advertise the city in other states and countries generates more income for both hoteliers and the city through hotel tax revenue. 

Now, many of Surf City’s hoteliers are asking to raise that special tax on themselves by 2% to spend more money advertising the city, which would bring the total hotel tax in the city to 16% per room. 

Just over a third of that 16% or roughly $10 million under the expansion goes toward funding Visit Huntington Beach, the rest of it going straight to city coffers. 

“We bring in millions of visitors generating about half a billion dollars in annual direct economic impact and supporting over 4,000 jobs,” said Visit HB CEO Kelly Miller at the city council’s April 16 meeting. “A drop in visitors to Huntington Beach will undoubtedly reduce (hotel) tax revenues, sales tax revenue and parking revenue.” 

Of the $10 million, about 75% will be spent on advertising and local tourism programs, while another 20% is going to be spent for Visit HB’s staff administration.

After publication, a spokesperson for Visit Huntington Beach clarified the administration costs include staff salaries, office rent, utilities, office equipment, taxes, liability, the company vehicle and tourism industry professional memberships.

Those bureaus have been increasingly pulled into the spotlight over the past year amidst questions over Visit Anaheim, one of the largest and most well-funded tourism bureaus in the county, responsible for advertising venues like Disneyland, the Honda Center and the Anaheim Convention Center.

A state audit found Visit Anaheim inappropriately shifted some of the tax dollars it got to the Anaheim Chamber of Commerce, which then spent the money lobbying elected leaders. 

State auditors also questioned if Anaheim officials needed to send the tourism bureau a $6.5 million bailout when the pandemic first kicked off in early 2020 because Visit Anaheim already had $6 millions in reserves.

Through a law firm, Visit Anaheim representatives pushed back on the claim they had millions in reserves.

[Read: CA Auditors Lambast Anaheim’s Tourism Bureau, Find Improper Tax Dollar Spending]

Visit Huntington Beach has also been increasingly in the spotlight over the past year due to controversy around the Pacific Airshow, one of the city’s biggest annual events. 

Kevin Elliott, CEO of Code Four, the company which hosts the air show, sits on Visit HB’s board of directors, and the bureau has repeatedly produced reports claiming that the airshow generates as much as $120 million in direct spending in a single year. 

But it remains unclear how accurate those reports are, with even the report’s authors admitting they don’t know the precise details on how they reached that number. 

[Read: How Much Money Does the Pacific Airshow Bring to Huntington Beach?]

There’s also an ongoing discussion among some other city officials about how to manage tourism advertising going forward. 

In Newport Beach, hoteliers are talking about breaking away from the city entirely, running their own marketing operation as a separate nonprofit without any tax dollars. 

[Read: Newport Beach City Leaders Question Tourism Advertising Spending]

In Anaheim, city leaders are struggling to decide what kind of relationship they’ll have with Visit Anaheim going forward after the agency just appointed a new CEO – including discussions of using some of that self-imposed hotel tax to fund affordable housing. 

Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.