Eau Claire on pace for a big '22 for tourism revenues

Oct. 27—EAU CLAIRE — Local hotel room tax revenues could hit a new high point this year, signaling that Eau Claire lodging continues to thrive beyond 2021's rebound.

Fueled by people eager to travel after living through COVID-19 restrictions, taxes collected from Eau Claire hotel stays reached $2.4 million last year — well above prior years and a major improvement on 2020's pandemic-hampered downturn.

"Last year was the new record, and looks to get beaten pretty heavily this year," said Benny Anderson, executive director of Visit Eau Claire, the local convention and visitors bureau.

Part of that is due to 2021 starting out slow as the pandemic was still affecting tourism early that year.

"We had kind of a soft opening for COVID," he said.

That hasn't been the case for 2022 though, Anderson said, noting that business has been steadier and busier than before.

For the first half of this year, hotel revenues were up 40% from the same time in 2021, he said.

Some of that does have to do with hotel operators charging higher rates than before. But it's also due to higher occupancy rates plus more rooms available since more hotels have been built in recent years.

"We're selling more rooms at a higher rate with a better occupancy rate as well," Anderson said.

The City of Eau Claire, which receives local room taxes and distributes 70% of them to Visit Eau Claire, made conservative expectations in this year's budget. The city's 2022 budget approved last fall included $1.66 million in room tax revenues. That's about twice the abysmal $838,000 collected in 2020, but still under the $2 million seen in previous years.

With three months yet to be tallied, the city's already surpassed what it budgeted for this year for revenues from hotels. The city has already gotten $1.9 million in room taxes through September, according to the latest figures available from Eau Claire's Finance Division.

How the remaining months of 2022 will go is yet to be seen, but Anderson said early indications are that consumer price inflation is not yet making a notable impact on travel.

"People are cutting back on other things, not necessarily tourism," he said.

Visit Eau Claire is expecting the local tourism industry to keep up its momentum going up into next year.

"We're projecting to go from 2022 to 2023 with growth still," Anderson said, saying the current forecast is for about 5% growth.

The city is still cautious about its expectations in the coming year for revenues from hotel stays.

Collections have gone up an average of 6% annually based on data from the past 10 years. But the city is only budgeting for a 3% revenue increase from room taxes in its proposed 2023 budget.

"We remain conservative since we do not want to end up with a deficit in the budgeting process," Kitzie Winters, city finance director, said in an email.

That still results in an expectation of $2.52 million on taxes from people staying at hotels in Eau Claire in 2023.

Eau Claire charges an 8% tax on hotel rooms, which provides funding to Visit Eau Claire and some city amenities — Hobbs Ice Center, Fairfax Pool and parks projects — that help bring tourists to the Chippewa Valley.

Eau Claire is among Wisconsin communities that quickly bounced back from COVID-19's impact on their hotel lodging, but the recovery was uneven in the state.

According to a report issued earlier this month by Wisconsin Policy Forum, room tax collections in Madison and Milwaukee did not return to pre-pandemic levels until 2022. With recreational vacations returning faster than business travel, communities including Eau Claire, Wisconsin Dells and La Crosse saw their hotel businesses fully rebound last year based on room tax revenues.