November 29, 2008 --Bay Area hotels are in neck-and-neck competition to woo overnight visitors. But in that struggle to lure tourism and convention business dollars, Oakland is having a hard time keeping up. The odds recently worsened when the city pulled the funding for the Oakland Convention and Visitors Bureau, which is the city's public relations firm in charge of drumming up tourists despite a fast-shrinking budget.

In response, a proposal is in the works to bump up the funds for marketing Oakland to the tourist trade industry. Known as the Oakland Tourism Business Improvement District, the program would go into effect in June with an estimated budget of $1.5 million in the first year, according to a report by the Community and Economic Development Committee.

That is more than double the previous budget of $650,000 annually for the past six years, which was relatively small for the size of the city and its efforts to sell Oakland's image.

In addition, without the infusion, the bureau's budget would be at zero (except for past city-paid performance bonuses and other resources the five-person team was able to tap) come Jan. 1 after funding was suspended last month because of municipal financial woes.

"We were always at risk," executive director Manette Belliveau said of the two-year budget with the city that could be canceled with 60-days notice. "Whenever you're dependent on city funds, you're at risk," she said.

Oakland's fight for tourism dollars is all the tougher with only about 4,600 to 4,800 rooms compared to San Francisco's 40,000 rooms.

The proposed program will not add to the city's coffers directly. But the extra money generated through tourism will create more jobs and economic vitality, which makes for a more attractive city, Belliveau said.

Already, tourism dollars accounted for $12.2 million destined for the general fund. Although that makes up only a small amount of the overall budget, those are dollars that are not restricted for a specific use and that the state does not collect.

Visitors spend more on dining than they do on the actual hotel room, in addition to retail and transportation dollars, Belliveau said. The tourism district fees will be based on the number of guest rooms rented each night.

Hotels with 20 to 74 rooms will add a $1.50 charge per night to guests and a $2 charge per night for hotels with 75 and more rooms. Altogether, there are 4,500 such rooms.

The proposal took a few years to gain popularity because hoteliers worried that they would lose the funds if another resource was available. But the idea gained traction with the worsening budget crunch, prompting hotels to turn to the proposal as a way to remove the tourism budget from the downward spiral that has plagued cities and prompted Sacramento, San Jose, Santa Clara, San Mateo, San Francisco and others to pursue a similar solution.

The plans are not yet final on the proposal. The focus will be on the needs of the hotels to draw in business but a separate committee, including related businesses, will chime in about how to contribute to Oakland's tourism success.

If the city restores the bureau's funding, it would come on top of the tourism district, which is a five-year contract. The city would not have to restore the budget to the previous $650,000 level. But Belliveau said, "It would certainly be our hope that we would be reinstated on some level."

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