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A Growing Tourism Strategy That Works for Small Towns!
From Peoria, Illinois, to small communities across America, a growing tourism strategy is giving local destinations more control over their economic future. And some have been doing it for nearly 20 years.
What if your small town could create its own dedicated funding source to attract visitors, recruit events, fill hotel rooms, and bring more customers into local businesses?
That's exactly what Peoria, Illinois, is doing. And while its new approach is making headlines, other smaller communities have been using similar strategies for years.
The idea? Stop treating tourism as an occasional marketing campaign and start treating it as a long-term economic development investment.
Peoria, Illinois: A New Tourism District With Big Ambitions
In September 2026, Peoria's City Council approved the creation of a Tourism Improvement District (TID).
Beginning November 1, 2026, a 1.5% assessment on qualifying hotel and motel stays will help fund tourism marketing, event recruitment, and destination development.
According to Discover Peoria, the district could generate approximately $700,000 annually in dedicated tourism funding.
That money can help the community compete for sporting tournaments, conventions, group travel, and special events that might otherwise choose larger destinations.
Rather than relying entirely on traditional tourism funding, participating lodging businesses help generate an additional, dedicated investment pool.
And here's where this becomes especially interesting for smaller communities.
Peoria isn't inventing something new. It's adopting a model that other destinations have been refining for decades.
Small Communities That Started Years Ago. Where Are They Now?
1. Mendocino County, California: Nearly 20 Years of Tourism Investment
Established: 2006
Mendocino County, home to smaller communities such as Fort Bragg, Point Arena, Willits, and Ukiah, established a lodging Business Improvement District in 2006.
The program uses a 1% lodging assessment to support countywide tourism promotion.
Where are they now?
Nearly two decades later, the district remains active. County officials continued the assessment through fiscal year 2025-2026, supporting the Mendocino County Tourism Commission's marketing efforts.
For rural communities with limited marketing budgets, this demonstrates the staying power of a shared tourism funding strategy.
2. Door County, Wisconsin: A Small-Town Tourism Powerhouse
Established: 2007
Door County offers one of the most compelling examples in the Midwest.
Its Tourism Zone Commission was established in 2007, with all 19 municipalities participating by 2009. The communities include charming destinations such as Egg Harbor, Sister Bay, Fish Creek, and Ephraim.
Unlike Peoria's business-assessment model, Door County uses a coordinated lodging room-tax system, directing a substantial portion of collections toward tourism promotion.
Where are they now?
The numbers tell quite a story.
2009 visitor spending: $257.1 million
2024 visitor spending: $523.2 million
2024 state and local taxes generated by tourism: $53.3 million
That represents more than a doubling of annual visitor spending in nominal dollars over 15 years.
Those gains cannot be attributed solely to the tourism zone, but they demonstrate the scale of the visitor economy the communities are collectively supporting.
3. Paso Robles, California: From Wine Country to a Tourism Brand
Established: 2008
Paso Robles didn't always have the recognition it enjoys today.
In 2008, the community established a tourism and lodging business improvement district, beginning assessments in early 2009.
The strategy helped create reliable marketing resources for promoting wine tourism, downtown experiences, restaurants, and lodging.
Where are they now?
Paso Robles evolved its original program into a new tourism improvement district in 2017. In 2022, city leaders renewed the district for another 10 years with a 2% lodging assessment.
Its destination marketing organization, Travel Paso, now operates with a multiyear strategic plan and publishes annual reports.
The community has also invested in visitor wayfinding, including a project involving 34 signs to help visitors discover downtown attractions and other destinations.
The lesson? Tourism isn't just about convincing someone to visit. It's about making the experience so good that they stay longer and return.
4. Mammoth Lakes, California: Taking the Tourism District Idea Even Further
Established: 2013
Mammoth Lakes took a different approach.
Its Tourism Business Improvement District includes not only lodging businesses but also participating restaurants, retailers, and the ski industry.
Why? Because the entire tourism economy benefits when visitors come to town.
Where are they now?
For fiscal year 2025-2026, the town projected approximately $7.4 million in tourism district revenue.
The funding supports destination marketing, promotion, and efforts to attract visitors beyond peak seasons.
Mammoth Lakes is also emphasizing responsible tourism, recognizing that a successful visitor economy must benefit the people who live and work there.
5. Lake County, California: Rural Communities Working Together
Established: 2018
Lake County's tourism district includes the small cities of Lakeport and Clearlake, along with surrounding communities.
Created with a 1.5% lodging assessment, the district was designed to promote the region's lakes, wineries, outdoor recreation, and other attractions.
Where are they now?
The district was renewed for a 10-year term beginning in January 2024.
According to county records, Visit Lake County has continued using coordinated marketing, visitor publications, digital content, and partnerships to promote the destination.
California tourism estimates placed Lake County travel-related spending at approximately $196 million in 2023.
This is especially relevant for rural communities that might not have enough lodging properties or tourism resources to compete individually.
And Now, Smaller Illinois Communities Are Joining Forces
Peoria isn't the only Illinois community making a move.
In October 2026, the Rockford region received final approval for a multi-city Tourism Improvement District involving Rockford, Loves Park, Cherry Valley, and South Beloit.
The new district is projected to generate approximately $1.38 million annually for destination marketing and attracting sporting events, meetings, and group travel.
It's too early to measure the results, but the structure is noteworthy: communities are joining together to compete for opportunities they might struggle to capture individually.
Could This Work in Your Small Town?
Absolutely worth exploring, especially if your community has hotels, attractions, festivals, sports facilities, or several neighboring towns that could market themselves together.
But a tourism district shouldn't simply be another way to collect money.
Before pursuing one, community leaders should consider:
Start with the lodging industry. Would hotels and other tourism businesses support a dedicated assessment if they could help shape the investments?
Think regionally. A collection of small towns may have a much stronger tourism story together than separately.
Identify what you're missing. Is it marketing, event recruitment, better visitor experiences, or year-round programming?
Measure the return. Track room nights, visitor spending, event bookings, occupancy, and local business activity.
Research your state's laws. Tourism districts, lodging assessments, and room taxes are not interchangeable, and their formation requirements vary.
And remember, if your town has very few hotel rooms, a lodging-funded district might not generate enough revenue on its own. Regional collaboration or another legally available funding structure may make more sense.
Tourism Is Economic Development. Period.
For years, many small communities treated tourism as something that happened after the economic development work was finished.
But visitors support restaurants, retailers, entertainment venues, attractions, and jobs. They also become familiar with communities they might someday choose for a business investment or new home.
The communities that recognized this years ago are still investing in their visitor economies today.
Peoria's latest initiative is another reminder that tourism doesn't have to be left to chance.
Sometimes the smartest economic development strategy is to stop waiting for visitors to discover your town and start giving them a reason to come.
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