Economic impact of Missoula tourism at $360 million

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As tours and tourism have been impacted during the pandemic, Montana has become a safe getaway with its sparse population and open spaces.

Missoula has captured its share of that traffic, and its tourism arm at Destination Missoula is now working to bring visits and spending back to pre-pandemic levels — an investment in jobs and taxes that it pays back to the community.

Barb Neilan, executive director of Destination Missoula, said tourism accounts for $294 million in direct spending in Missoula each year and $360 million in total economic impact from visitor spending. It’s up to Destination Missoula to promote the city and keep those numbers strong.

“Tourism is an important part of our economy in Missoula,” Neilan said. “The money that’s collected just in Missoula is $19.7 million in state and local taxes.”

To reach an outside audience, Destination Missoula advertised in Seattle Magazine, Outside Magazine and Good Housekeeping this year.

Neilan said the organization’s website now claims 1.2 million unique visitors each year and 231,000 annual enquiries. He also claims 78,000 social media followers.

“It’s a range of different markets that we’re trying to reach,” Neilan said.

Of the revenue generated by the state’s 8% lodging tax, approximately 4% is donated to promoting state tourism. Destination Missoula receives a portion to promote tourism locally and to support tourism-related businesses and projects.

This includes a “Recreate Responsibly” campaign and a revenue guarantee to support new commercial air service at Missoula Montana Airport. This program has been successful in recent years and has helped bring American Airlines to Missoula with direct service to Dallas/Ft. The pain.

“We are the only organization currently supporting the Missoula Air Service Guarantee Fund,” Neilan said. “With the expansion of the airport, it will now have the capacity to attract more flights and start talking to new airlines again to bring them in. We want to have the money to support them.”

Neilan said the largest portion of tourist spending in Missoula goes to gasoline, followed by bars and restaurants, hotels, retailers and grocery stores. The number of visitors coming to the city – and those already living there – has prompted Destination Missoula to launch a new campaign on how to recreate responsibly.

“We were able to start seeing a return of people before anyone else. But it also created problems that we hadn’t had before,” Neilan said. “We had a ton of first-time recreators, not just visitors but also residents. We launched a fairly massive responsible recreation campaign, which we continue to this day.

Yet disbursement of taxes generated by the 8% lodging tax and 4% car rental tax remains a source of frustration for both Destination Missoula and city and county officials.

In recent years, Missoula and other municipalities have lobbied the legislature to support a tourist tax to bring more revenue to local communities for other needs, which are currently funded primarily through property taxes.

Of the 8% lodging tax, 3% goes to the state general fund and of the 4% car rental tax, 75% goes to the state general fund.

“That’s where the hiccups are,” Neilan said. “I know the argument is that we don’t get money from visitors – we get it. It just goes into the general state fund and not into the communities as it should.

If the state allowed cities and counties to pass a local option tax, it could help ease property taxes and ease the burden on car rentals and hotels to haul alone, advocates say.

“The local option tax lets you spread things out a bit more, and you can decide what it’s going to be put on,” Neilan said. “Right now it’s all pretty hefty from car rental companies and hotels. That’s where the money is coming from. A local option tax lets you spread that across multiple avenues.

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