Select Board Supports Tourism Destination District

HARWICH – The select board has endorsed the town’s inclusion in a proposed Cape-wide Tourism Destination Marketing District.

In a presentation last week, Paul Niedzwicki, CEO of the Cape Cod Chamber of Commerce, said approval of a tourist improvement district on Cape Cod would generate a dedicated and stable source of funding designed to increase competitiveness for tourist dollars. The district would receive funding through a new 1.5 percent surcharge on hotels and motels with 15 rooms or more. Those funds would be collected by the state Department of Revenue administered by the Cape Cod Chamber.

The chamber would be charged with creating a district plan in association with a steering committee composed of lodging businesses. The funds must be spent in ways that directly benefit participating lodging businesses and the district, according to Niedzwicki.

Sixty percent of the funds generated would be dedicated to sales, marketing, destination development and special events; 25 percent would be directed toward workforce and business development; and 15 percent for reserves and administration.

With 165 hotels and motels on the Cape eligible to participate in the district, it could potentially generate $3 million annually. Niedzwicki said when the state has budget problems, tourism funds are one of the first things to be cut; the new funding would ensure a continuation of a stream of revenue.

One of the focuses of a district plan would be to draw more people to the Cape in the shoulder seasons when many of the lodging facilities are empty, he said.

The 1.5 percent surcharge would increase room taxes in Harwich from 14.45 percent to 15.95 percent. Niedzwicki said studies show that as long as such charges remain below 20 percent there are no adverse impacts on the demand for room rentals.

Among the benefits for Harwich, he said, would be a $12,000 annual contribution to the local chamber of commerce and funding to promote special events like the Harwich Cranberry Arts and Music Festival and Christmas in Harwich.

As plans develop for the construction of new bridges across the canal, public outreach will be imperative to inform tourists there will only be a negligible impact on traffic during the seven to 10 years it takes to construct two new bridges, Niedzwicki said, otherwise there could be an economic slowdown. People might not want to come to the Cape, fearing the traffic snarls related to bridge construction, he said. A “Cape is Open for Business“ public relations campaign will be needed.

“The reality is it will have a negligible impact compared to the maintenance that happens on those bridges every year,” Niedzwicki said. “The single lane closures have a traffic and economic impact. The replacement bridges will be built alongside of the existing bridges, allowing for two lane flow during construction.”

There is also a need to rejuvenate the J-1 and H-2B visa programs, providing more workers for local businesses, he said. In 2018 there were 5,000 workers in the J-1 visa program on the Cape, but with the pandemic those numbers slipped to 2,100 in 2022. Businesses have not been able to get the workforce required to sustain the hours they previously had, he said, adding that restoring the J-1 visa and adding the H-2B visa program to meet workforce demands would be a goal of the district plan.

To implement the 1.5 percent fee, 62 percent of hotels and motels in the community agree to the surcharge. Harwich Chamber of Commerce Executive Director Cyndi Williams told the board she has received a commitment from four of the six lodging facilities in town eligible to participate in the district, which exceeds the 62 percent threshold. Hotels and motels that meet the 15-room minimum district criteria in Harwich are Wequassett Resort and Golf Club, Winstead, Pelham on Earle, A Beach Breeze Inn, Inn on the Beach and Handkerchief Shoals Inn. The Wychmere Harbor Club is not considered a hotel-motel under the district criteria.

“One of the most compelling pieces of information for us was hearing that many other tourism destinations in New England and beyond have already established TDMDs,” Pam and Brant Lemieux of A Beach Breeze Inn wrote in a letter to the board. “We feel that establishing a TDMD here will help us stay on a level playing field with these other markets.”

In a letter to the select board, Alton Chun, regional managing director of Wequassett Resort and Golf Club, also supported the district.

“The proposed TDMD serves as a transformative tool that empowers lodging businesses to create a consistent source of funding for tourism promotion,” he wrote. “These funds are subsequently reinvested into local businesses and communities. TDMD funds can be strategically utilized, such as boosting business volume during off-peak months, supporting workforce housing initiatives, and alleviating the impacts of over-tourism on our region.”

Not all of the lodging owners agree. Peter McAree, owner of the Inn on the Beach, did not commit to participating. He had several questions about the impacts on seasonal operations. McAree said he is open from May to October and the plan to expand the shoulder season would have little benefit to him. He expressed concern that the 1.5 percent increase could raise the question “are rates getting too high?”

Some of the funds generated from the district should be directed to investment in lodging infrastructure, he said, such as winterizing his rooms. McAree also wanted to know the makeup of the steering committee. Niedzwicki said it would be composed of representatives from lodging businesses, and added that an additional representative from the seasonal lodging businesses could be added to the committee.

Select Board member Donald Howell said there is nothing that addresses the imbalance of Airbnbs and Vbro, companies that rent single-family homes. They would be paying nothing, yet they would be benefiting, Howell said.

Niedzwicki said there are 18,000 short-term rentals on the Cape. Hotels want the tourism district funding because they are losing money to short-term rentals, he added.

The select board voted 4-0 to approve the district in Harwich. The hotels and motels will have to take an official position on the surcharge to include Harwich in the district. If the 62 percent threshold is met, all six facilities will be required to add the surcharge. The district can be dissolved at any time, and the district will be reassessed in five years.