TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Public Hearing to consider modifications to the Tourism Promotion Area code to apply to Short Term Rentals (Ordinance 4-25).
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Strong and Diverse Economy
end
SUMMARY:
summary
In October 2024, the City Council approved an adjustment to Salem Revised Code (SRC) Chapter 38 which governs the Tourism Promotion Area (TPA). The adjustment removed Short Term Rentals (STRs) and Accessory Short Term Rentals (ASTRs) from the TPA at the request of the Salem tourism community.
Ordinance 4-25 brings the STRs and ASTRs back into the TPA, with the code amended to allow both STRs / ASTRs and traditional hotels / motels one vote for each unit available to rent to decide whether the TPA continues.
end
ISSUE:
Shall the City Council conduct a public hearing in consideration of Ordinance 4-25?
RECOMMENDATION:
recommendation
Conduct a public hearing in consideration of Ordinance 4-25.
body
FACTS AND FINDINGS:
In 2019, the City Council approved an Economic Improvement District (EID) for the Tourism Promotion Area in Salem. As an EID, the TPA is required to be renewed after five years which last occurred in 2024. The TPA established a 2% fee on overnight stays in Salem hotels and motels, including stays booked through booking agents like Expedia. Of the fee revenue collected, 95% is remitted back to the City’s Destination Marking Organization which is currently Travel Salem. These funds are to be used to benefit those in the TPA by promoting overnight tourism and the lodging business environment through advertising, branding efforts, promotions, sponsorship of special events, and other programs that increase overnight transient lodging stays. Up to 5% is retained by the City to cover costs like staff time, banking and investment fees, and credit card processing fees.
Due to the TPA being structured as an EID, there are provisions regarding how members of the EID can object to the TPA. In accordance with State law and Ordinance 4-25, if objections are received by operators totaling 33% or more of available rooms, the TPA will be terminated. In conjunction with the Code Compliance and Planning divisions, the Finance Department sent letters out to registered and non-registered operators on October 17, 2025, informing them of this public hearing and ways they could provide comment. To date, the City has heard from four operators representing eight units in opposition of the TPA continuance which represents .37% of the total available units.
BACKGROUND:
In 2019, Travel Salem and the Salem Area Lodging Association approached the City to establish the TPA. Travel Salem also approached the City in 2025 to include ASTRs and STRs as part of the TPA, initiating this public hearing. Code Compliance staff provided contact information for presumed but non-registered ASTRs and STRs. From fiscal year 2020 through fiscal year 2025, over $5M in revenue has come in from the TPA with over $4.8M paid to Travel Salem.
Attachments:
1. Public Comment
2. Presentation