COVID-19 prompts city to provide money for marketing Sioux Falls as safe place for events during pandemic

KELOLAND.com Original

SIOUX FALLS, S.D. (KELO) — The Sioux Falls City Council voted to provide $225,000 to Experience Sioux Falls, formerly the Sioux Falls Convention and Visitors Bureau, to market the city as a safe place to host events during the pandemic this fall and winter.

In a memo to council members, finance director Shawn Pritchett said several council members reached out to him about the opportunity for the city to capitalize on promoting itself as a safe place to host events when many communities are closed or not allowing events in any way.

Council member Curt Soehl said during the Sept. 15 meeting that the city could use (CARES Act) money to stimulate the economy.

Earlier this month, Gov. Kristi Noem’s administration announced it would spend $5 million in CARES Act money on tourism advertising.

The $225,000 would help ensure a viable city partner can continue to operate effectively during the pandemic, Pritchett said during the Sept. 15 council meeting.

Visitors to Sioux Falls created an economic impact of about $455,700,000 in 2019, Experience Sioux Falls executive director Teri Schmidt said in an Aug. 25 presentation to the city. The city drew nearly 2 million visitors last year, Schmidt said.

Experience Sioux Falls graphic on visitor impact in 2019. Graphic was presented at an Aug. 25 city meeting.

Pritchett’s Sep. 14 memo to the council cites several council members who pointed out many communities are closed or not allowing events in any way.

Mayor Paul Ten Haken has stressed that the number of hospitalizations in the city are low, which is good as the pandemic continues. Ten Haken said in an Aug. 17 news conference that if hospitalization numbers reached 40 each at Avera and Sanford or if hospitalizations increased at the rate of the percent positive rate for cases, it could cause the city to consider a mask mandate.

The Sioux Falls area had 55 people in the hospital, 705 active cases, a weekly percent positive rate of 14% and 272 active cases per 100,000 people as of Sept. 17.

The July financial report for the city of Sioux Falls shows the changes in taxable sales by industry. Lodging was down 45% in June transactions.

June transactions in several industries generating sales tax for the July financial report. City of Sioux Falls table.

“We are in a crisis in health care but were in a crisis somewhat of economics as well,” Pritchett said on Sept. 15.

COVID-19 has hit the hospitality industry, which includes bars, restaurants, hotels and similar businesses but “…lodging is certainly the worst of all of them,” he said.

Pritchett compared the hotel industry to other critical infrastructure such as the wastewater system and roads. Hotels help ensure that Sioux Falls is an attractive place to visit, which improves the economy and the city for its residents, Pritchett said.

Pritchett said this is a key time to be marketing Sioux Falls to visitors but a cut to the Experience Sioux Falls budget has “effectively curtailed” marketing.

Experience Sioux Falls executive director Teri Schmidt said in an Aug. 25 presentation to the city that her organization has cut 35% from next year’s budget to help compensate for losses caused by the pandemic. The cut is about $800,000. Some of that cut means a reduction in marketing, she said.

Hotels help to fund Experience Sioux Falls through a $2 tax assessed to each room per night in the city, Schmidt said at an Aug. 25 presentation to the city. The $2 Business Improvement District tax was established by the local hotels, Schmidt said. Another 1% tax on visitors is collected for the organization.

When occupancy rates are down, the BID revenue is also down, Schmidt said.

July occupancy rates in Sioux Falls were down 43.7% and down 32.3% year to date, Schmidt said on Aug. 25.

The city has about 5,387 hotel rooms in 61 hotels, Schmidt said. When the Hyatt Place opens in September, it will add 112 total rooms for a total of 5,499 rooms in 62 hotels.

The pandemic struggles follow a robust year for visitors in Sioux Falls and the region.

Schmidt said 2019 was the first year visitor spending in the southeast South Dakota region was higher than the Black Hills Region. In 2019, the region had $1.6 billion, or 40%, of the all the state’s visitor spending.

Minnehaha County had 74% of all visitor spending and 29% came from Sioux Falls in 2019, Schmidt said.

Schmidt said about 1.8 million visitors from at least 50 miles away came to Sioux Falls in 2019.

Some of the potential visitors interested in South Dakota include residents of the Denver area, Pritchett said as an example of who and what areas could be targets for marketing this fall and winter.

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