Mackinac Island hotels will soon be collecting a 2% room tax that will fund marketing efforts to bring more people to the Straits of Mackinac. All hotels and other lodging establishments with 10 rooms or more will be participating in the program and will operate as a new nonprofit organization called Mackinac Island Convention and Visitors Bureau. They comprise 21 properties with 1,302 rooms.

The 2% tax will be charged to hotel guests against basic room rates, but not food and beverage or other services. It will be collected and disbursed in much the same way as sales tax, except, instead of being sent to the Michigan Department of Treasury, the assessments will be deposited with First National Bank of St. Ignace in care of the Convention and Visitors Bureau (CVB). The bank will audit the deposits and ensure individual deposits are not known to other members. The 2% assessment charge must be clearly noted on a guest's room statement.

The tax could bring in as much as $600,000 a year for marketing, advertising, and promotions for Mackinac Island, said Dennis Cawthorne, an Island businessman and Lansing attorney who orchestrated the legislation needed for Mackinac Island hotels to be able to collect the room tax. At least initially, he said, the group will target a market in Michigan and surrounding area within seven hours of Mackinac Island. He said the marketing program will include print, broadcast, and digital media in the designated markets.

The Mackinac Island Tourism Bureau will remain a separate entity and, while some programs will compliment those of the Convention and Visi- tors Bureau, operations will be independent of each other.

“I want to emphasize that the new Mackinac Island Convention and Visitors Bureau will not be part of or replace the Tourism Bureau,” Mr. Cawthorne said, although he noted that the two groups will share the some of the same objectives and participate in some of the same programs.

The CVB will promote the Island as a whole, he said, and will not promote any individual member business.

Balloting for a four-person board of directors to run the organization will end this week. At least three of the members will be hotel operators, according to the group's articles of incorporation, and members of the assessment district, who vote the number of rooms they have, are expected to retain the four incorporating members, R. Daniel Musser III of Grand Hotel, Robert G. Benser of Chippewa Hotel, Todd Callewaert of The Island House, and Mr. Cawthorne.

An informational meeting of the hotel operators to hash out some of the details of the new organization has been scheduled for Tuesday, July 6.

Under the law, the bureau must be a nonprofit corporation and report its audited assessment revenues and disbursements to the membership at least annually.

Mackinac Island now joins the rest of the state in being able to assess transient hotel guests a tax that can be used for marketing. Similar districts are set up in St. Ignace and Mackinaw City. The Island was excluded from such practices under the Michigan Community Convention or Tourism Marketing Act of 1981, when hotel owners here told legislators they were not interested in it. The act, when passed almost 30 years ago, therefore, excluded special charter cities, the City of Mackinac Island being the only such municipality in the state.

With declining tourism and a sagging economy, Mr. Cawthorne said, hotel owners on Mackinac Island now see the room tax as an opportunity to boost promotion efforts downstate.

State Senator Jason Allen introduced legislation to amend the Community Convention or Tourism Marketing Act Wednesday, March 3, and it passed both houses by May 18 and was signed into law by Governor Jennifer Granholm Friday, May 21.

Lodging operators were more than 98% in favor of creating the assessment district, Mr. Cawthorne noted, in a poll taken among all establishments with 10 or more rooms.

The St. Ignace Visitors Bureau collected $209,874 last year in room assessments from 1,547 rooms in the district, about half of them closed during the winter months, said Debbie Durm, the bureau's director. Collections in 2009, she said, were 0.885% lower than 2008, supporting observations last fall that the summer business in St. Ignace held steady.

In Mackinaw City, the Mackinaw Area Visitors Bureau collected $451,127 in room taxes from about 2,000 rooms, according to the bureau.

The amended state act does not permit hotels on Mackinac Island to assess a 1% room tax to support the Upper Peninsula Travel and Recreation Association (UPTRA), the U.P.'s regional tourism organization. Lodging facilities in all other areas of the U.P. feed into that promotion effort, with the exception of ski resorts, which are not required to contribute, but may if they wish, and Mackinac Island, which was exempted from the Regional Tourism Marketing Act of 1989 in the same manner as it was exempted from the Community Convention or Tourism Marketing Act.

Many of the hotels on Mackinac Island are members of UPTRA, nevertheless, said Tom Nemacheck, UPTRA's executive director, but they are not allowed to collect the UPTRA room tax because this area is exempt from such authority.

Mr. Nemacheck said about 450 to 500 lodging properties do collect the 1% UPTRA assessment, which generates about $750,000 a year for promotion of the Upper Peninsula as a travel region.

Mr. Cawthorne said there are no efforts that he is aware of to change the legislation to allow hotels on Mackinac Island to contribute to the regional group's room assessment.

Hotel Assessments,

Number of Rooms

Bay View Bed & Breakfast, 16 Cloghaun, 11 Cottage Inn, 11 Grand Hotel, 382 Harbour View Inn, 47 Hotel Iroquois, 40 Island House, 94 Lake Bluff Condos & Suites, 15 Lilac Tree Hotel & Spa, 39 Mackinac Resorts, 29 Main Street Inn, 18 Metivier Inn, 22 Inn on Mackinac, 44 Mission Point Resort, 242 Pine Cottage Inn, 15 Pontiac Lodge, 13 The Inn at Stonecliffe, 49 Windermere Hotel, 26 Chippewa Properties, 36 Lake View Hotel, 84 Murray Hotel, 69

Total Rooms: 1,302