Richmond region launches state’s first tourism district

Virginia’s first tourism improvement district received approval this week and can begin collecting funds from Richmond-region travelers to fund tourism marketing efforts beginning July 1.

Following Richmond City Council’s approval vote this week, the new tourism improvement district, or TID, received the necessary support to move forward. Designated areas that raise funds for tourism marketing through hotel assessments, TIDs are new to Virginia, which in 2021 approved a process for establishing regional TIDs. There are more than 200 TIDs across the nation.

“This is an exciting day for the Richmond region,” Mayush Mehta, vice chair of the TID governance committee and regional vice president of JP Hospitality, said in a statement. “The approved TID is an investment in our entire community. These dedicated funds will help us invite and welcome new overnight visitors to our region who will support our small businesses, restaurants and cultural attractions. A tremendous amount of collaboration and hard work went into establishing the TID and we should all be proud.”

The state’s first TID will include Richmond, Chesterfield, Hanover and Henrico counties, as well the Town of Ashland, all of which voted to approve the district’s creation. Colonial Heights, which is also set to be part of the TID, has not voted yet, but is slated to take up the proposal in the fall. As part of the TID, local governments will contract with nonprofit Richmond Region Tourism to collect visitors fees and promote district tourism. The initial term of the Richmond area TID is 10 years and is subject to renewal.

Under state law, a TID requires approvals from each participating locality, as well as a majority of hotel owners who would pay more than 50% of the fees in each participating locality.

Beginning July 1, hotels with 41 rooms or more within the new Richmond regional TID will charge a 2% fee on nightly rates, which is expected to generate as much as $8.2 million annually. The funds will support Richmond Region Tourism’s efforts focused on attracting large-scale sports tournaments and conventions. The nonprofit Richmond Region Tourism promotes tourism in the area and the Richmond region’s TID will be managed by its governance committee, which consists of nine area hotel representatives within the TID localities. Two-thirds of the committee is made of up smaller hotel representatives with fewer than 149 rooms.

Officials in Fairfax County have also been working to launch a TID for the southern portion of the county, an area they have named Potomac Banks. Barry Biggar, president and CEO of Visit Fairfax, which has been behind that region’s effort, told Virginia Business Thursday that efforts remain ongoing and he hopes to have everything in place by the end of the year, if not earlier.