What is a Tourism Improvement Area (TIA)? 

 

A Tourism Improvement Area (TIA) is a business-led district composed of lodging businesses that voluntarily assess themselves to fund tourism marketing and promotion efforts. The purpose of a TIA is to increase visitation, boost hotel occupancy, and drive economic benefits for participating hotels and their surrounding communities. TIAs provide a dedicated, sustainable funding source to support tourism-related initiatives. Unless an Arizona resident stays in a hotel within a TIA district, the resident will not pay any assessment fees.   

 

 

How is a TIA different from other taxes or assessments? 

 

Unlike traditional taxes, a TIA is initiated and approved by local lodging businesses, not imposed by the government. The assessment is industry-driven, and funds must be used exclusively for tourism promotion and visitor attraction efforts. TIA funds cannot be redirected for general municipal purposes [Source: 48-6503(D)] 

 

 

Why does Arizona need a TIA? 

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• Tourism is the lifeblood of Arizona’s economy, reaching the far corners of the state. This is a fiercely competitive industry, and Arizona competes with destinations like Texas, Colorado and California, among others, all of which invest significantly more in tourism marketing. 

• Funding for Arizona’s tourism industry is significantly less than what our competition has to spend to attract leisure, group and convention business. 

• To date, 23 states and 215 cities – nationwide - have already enabled Tourism Improvement Areas, giving their destinations a competitive edge in attracting visitors, meetings, and events. 

• Traditional funding sources, such as state and city budgets, are not enough to sustain the level of marketing needed to remain competitive. 

• More visitors mean more dollars flowing into Arizona’s economy, supporting essential public services like police, firefighters, teachers, libraries, and parks. 

• By generating increased visitor spending, TIAs help reduce the tax burden on residents while enhancing their quality of life, creating demand that leads to more local businesses, attractions, and amenities that Arizonans can enjoy year-round. 

 

 

How does a TIA generate funding? 

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Participating lodging businesses collect an assessment (up to $5 or 5% per room per night) from guests and remit payments to the Arizona Department of Revenue at the same time they pay their transaction privilege tax. [Source: 48-6507(A)(B)] 

Funds are transferred to the designated Owners’ Board which oversees spending in alignment with the approved TIA plan. [Source: 48-6505(A)] 

 

 

What will the TIA funds be spent on? 

 

TIA funds must be used exclusively for tourism promotion and marketing efforts, such as: 

• Advertising and digital marketing campaigns targeting leisure and group travelers. 

• Incentives for conventions, meetings, and sporting events to increase bookings. 

• Support for destination marketing programs, special events, and visitor services. 

 

Funds must be used to benefit the lodging businesses that pay the assessment, but they may also support industries closely tied to tourism. [Source: 48-6503(B)] 

 

 

Who oversees the TIA? 

 

Each TIA is managed by an Owners’ Board, which consists of a majority of lodging business owners or their authorized representatives. The board ensures that funds are spent according to the approved TIA plan, with transparency and accountability measures in place. The governing body (municipality or county) contracts with the Owners’ Board to administer the funds. [Source: 48-6505(A)] 

 

 

Who approves the formation of a TIA? 

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• A petition signed by lodging business owners representing at least 67% of total rooms within the proposed TIA must be submitted to the local governing body (municipality or county). [Source: 48-6502(A)] 

• A public hearing is held, allowing lodging businesses to provide input before final approval. [Source: 48-6504(C)] 

• If less than 34% of rooms object, the governing body may approve the TIA. [Source: 48-6504(E)] 

 

 

What types of hotels are included in a TIA? 

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• Hotels, resorts, and other lodging businesses that provide transient accommodations may be included in a TIA. [Source: 48-6501(3)] 

• The assessment rate and eligibility can vary based on the size and type of lodging business, as outlined in the approved TIA plan. [Source: 48-6503(A)(4)] 

 

 

Who is responsible to pay the assessment? 

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The Tourism Improvement Area (TIA) assessment is paid by hotel guests as part of their lodging charges. It may be included in the room rate or listed as a separate line item on the guest’s bill. [Source: 48-6507(B)] 

 

 

How long does a TIA last? 

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Initial term: Up to 10 years (as determined in the approved TIA plan). [Source: 48-6504(H)] 

Renewals: A TIA can be renewed for additional 10-year terms through the same petition and approval process. [Source: 48-6508(A)] 

 

 

Can a TIA be dissolved? 

 

Yes, a TIA can be dissolved or not renewed if: 

• Lodging business owners representing 50% or more of total rooms submit a petition for dissolution. [Source: 48-6508(B)] 

• The governing body finds mismanagement, misappropriation of funds, or legal violations related to TIA operations. [Source: 48-6508(C)] 

• The TIA reaches the end of its term and is not renewed. [Source: 48-6508(E)]