Hotel rooms

Free hotel rooms? Sioux Falls competing for visitors

SIOUX FALLS, SD (KELO) — When cities offer more than 190 free hotel rooms, cash, and other incentives to attract organizations and conventions to their city, how can Sioux Falls compete?

In short, it can and cannot, said Teri Schmidt, executive director of Experience Sioux Falls, the former visitors and convention bureau. Schmidt gave city council an update on 2023 activities and budget during a city briefing on Tuesday.

Sioux Falls can’t offer 190 free hotel rooms, receptions, cash and other incentives, but it can compete, Schmidt said.

“We want to become more aggressive. We want to be spicy,” Schmidt said. “With this budget, we believe we are on the right track to beat the competition.”

The 2023 budget includes $619,000 in digital marketing plus smaller amounts for other marketing. There is another $65,000 for incentives.

“We have to do this, if we don’t improve our game we’re going to fall behind,” Schmidt said of Experience Sioux Falls’ digital marketing boost.

Digital marketing includes the use of social media, even Tik Tok, a social video site where users post videos.

Council Member Marshall Selberg asked how much Experience Sioux Falls has spent on its digital strategy in the past.

Schmidt said he spent about $458,000 last year and about $278,000 the year before.

Strategic investment

Schmidt said proximity is key to attracting visitors and events.

“We need more hotel rooms attached to the convention center,” Schmidt said. Because there are not enough hotels, it makes us lose business.

Council Member Rich Merkouris asked if there were more future opportunities for swimming events.

This is a growing sports market, but as with any event, location matters.

“…the ability to walk around it so people aren’t far from what they see as the action,” Schmidt said.

The city needs to consider what the neighborhood is around those pools, she said.

The Sioux Falls experience also has to deal with the sometimes limited availability of larger meeting rooms, Schmidt said.

A solid 4th quarter needed to get through 2021

Experience Sioux Falls is funded by a $2 hotel fee per room per night and a 1% hotel tax. The $2 fee is a Business Improvement District or BID fee. BID fees were started by hotels in 2011 to pay for city marketing.

57 hotels, 5,168 rooms. “Our job is to fill those rooms,” Schmidt said.

Check out the Sioux Falls chart

BID fees raised $1.4 million in June. Another $729,599 was collected in the 1% tax at the end of May.

In 2021, BID fees raised $1.8 million and $1 million in the 1%.

Through July, the city had 898,470 visitors, Schmidt said. The economic impact of these visitors through July is $318,224,347.

“We know a lot more people coming to Sioux Falls, but if we can’t count them, we can’t trace them,” Schmidt said.

The city welcomed 1,235,490 visitors in 2021. The economic impact was $437,591,682.

“Are we going to reach the 2021 numbers? I hope so,” she said. “We have a little time left, a few months.”

Schmidt said the organization will be working hard to attract visitors this fall.

“Summer is coming to an end, it will be a different kind of traveler now to get us through the rest of the year,” Schmidt said.

So far this year, the hotel occupancy rate is 66.2%, which is the highest among 10 comparable cities. Fargo, in second, has a rate of 61.4%