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In-depth Analysis on Operation Trends and Financial Structure of DMOs 3. Size of Budget Revenue and Financing

3. Size of Budget Revenue and Financing
An analysis on the structure of the DMO’ budget revenue shows that financing of the majority of DMOs in North America depend on the public investment; 85.7% of the total budget revenue is financed by public funding. Especially, DMOs with a small budget are more likely dependent on public funds, approaching about 90% of their budget revenue. On the other hand, private investments in DMOs’ budget revenue weight only 14.3%. The private sources include membership dues, income generated by convention centers, printing and advertising programs, and corporate sponsorships.

Financing Public Funds: 85.7% of the Budget Revenue is from Public Funds

As of 2013, public funds accounted for 85.7% of the total budget revenue. An analysis on details of financing public funds indicates that 172 DMOs out of all respondents answer that they use hotel taxes as their funding source and hotel taxes occupy 75.1% of their budget revenue. That is, most of the budget revenue of these DMOs is covered by hotel taxes. Besides, many respondents say that they use taxes or support funds from local governments.
Procuring Private Investment: 14.9% of the Budget Revenue is from Private Investments

The rate of the private investment in the budget revenue is 14.3%, which is approximately 990 thousand US dollars. An analysis on financing private investments illustrates that many DMOs receive their primary source of revenue from membership dues (7.0%), print and advertising programs (4.6%), partnership income (4.1), and VIC income (1.8%). It is also shown that event hosting, cooperative advertisements, corporate sponsorships, website advertisements, and public relations are also major sources of private funding.

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