At a recent budget oversight hearing, the future of tourism funding in Washington, D.C. took center stage as officials discussed the implications of the proposed Fiscal Year 2026 Budget Support Act. The act seeks to eliminate the dedicated 1% hotel sales tax surtax, previously allocated to Destination DC, the city's primary tourism marketing organization. This change is projected to redirect approximately $25.7 million in revenue away from tourism promotion, significantly impacting the city's ability to attract visitors.

Elliot Ferguson, President and CEO of Destination DC, emphasized the critical role that tourism plays in the local economy, stating that the organization has been instrumental in generating record visitation and spending in recent years. In 2024 alone, D.C. welcomed 27.2 million visitors, contributing $11.4 billion in visitor spending and supporting over 111,000 jobs. Ferguson warned that removing the surtax would jeopardize this momentum, particularly as international visitation remains below pre-pandemic levels.

The Tourism Recovery District (TRD), established in 2023, was designed to bolster tourism marketing efforts funded by the surtax. Ferguson highlighted that the TRD allowed Destination DC to expand its marketing reach internationally, opening new offices in key markets such as Brazil, Mexico, and Japan. He argued that without the TRD, the city risks losing its competitive edge against other major destinations like New York and Los Angeles, which have significantly larger tourism budgets.

Ferguson also pointed out that the visitor economy provides immediate financial benefits to local residents, saving each household an estimated $3,600 in local taxes. He urged city leaders to reconsider the funding cuts, noting that the return on investment for tourism marketing is substantial—every dollar spent generates over two dollars in economic return.

The hearing underscored the delicate balance between budgetary constraints and the need for sustained investment in tourism. As the city grapples with economic challenges, the future of the TRD and its funding remains a pivotal issue for D.C.'s economic recovery and growth.