The City of Grants, New Mexico, introduced strict new standard operating procedures on Feb. 4, 2026, that fundamentally reshape how lodgers’ tax funding is allocated, a move that carries significant implications for campground owners, RV park operators and glamping resorts seeking tourism marketing support in the region. The changes, which city officials say are designed to align local practices with the New Mexico Lodgers’ Tax Act, sharply narrow the Lodgers’ Tax Advisory Board’s scope to focus almost exclusively on advertising and tourism promotion while explicitly separating operational expenses from the board’s oversight. For outdoor hospitality operators who rely on public funding to market their properties or host tourism-driving events, the new rules establish clear boundaries between what qualifies for support and what does not.
City officials stated the policy shift aims to mitigate audit and legal risk after years of blurred lines between marketing, facility operations and event expenses. Staff indicated that statutory minimums for promotion typically have not been met in recent years as awards leaned more heavily toward event and organizational operating costs. Under New Mexico law for municipalities in non-Class A counties like Grants, at least 50 percent of proceeds from the first 3 percent of the lodgers’ tax must go toward advertising, publicizing and promoting tourism-related attractions. For any portion above 3 percent, at least 25 percent must be dedicated to the same purpose. The city’s acknowledgment that these thresholds were not being met underscores the urgency behind the procedural overhaul.
Among the most notable changes is a new “60-mile targeting standard” requiring that promotional efforts funded by the tax primarily target potential visitors traveling from at least 60 miles outside city limits. “It’s about getting a return on investment,” said Fran Salas, city of Grants clerk, during a recent Lodgers’ Tax Advisory Board discussion while explaining the city’s new approach, the Cibola Citizen reported.
For RV parks, campgrounds and glamping resorts in the Grants area, the new 60-mile targeting requirement creates both a challenge and an opportunity. Operators who can demonstrate that their promotional efforts reach travelers from outside this radius may find themselves better positioned to secure lodgers’ tax funding. Digital marketing platforms offer built-in geographic targeting tools that align well with distance-based funding requirements. Most major advertising platforms allow businesses to set radius targeting or exclude local zip codes from campaign delivery. For RV parks and campgrounds specifically, effective long-distance visitor attraction typically involves route-based marketing targeting travelers along major highways and interstate corridors, since RV travelers often plan trips based on driving routes rather than single destinations. Seasonal targeting that aligns promotional pushes with peak travel periods, such as spring and fall for snowbird migration routes or summer for family camping seasons, can further strengthen funding applications. Maintaining clear documentation of campaign reach and geographic performance data has become standard practice for operators applying for tourism grants, and many property management systems now generate exportable reports showing visitor origin data that can demonstrate compliance with distance requirements.
The new procedures explicitly prohibit the use of lodgers’ tax awards for a wide range of operational and administrative costs. Ineligible expenses now include salaries, wages, benefits, utilities, insurance, rent, office supplies, routine maintenance and general overhead. Entertainment, prizes, gifts, alcohol and costs not directly connected to advertising and promotion are also barred. Costs related to facility management, staffing and event operations will instead be handled through separate contracts approved directly by the city, bypassing the advisory board’s award process entirely. City officials explained this separation is intended to reduce paperwork, clarify accountability and prevent marketing funds from being diverted into general municipal operations.
Eligible expenses under the new rules include radio, television, newspaper, billboard and magazine advertisements, as well as printed promotional materials such as posters, flyers, brochures and postcards. Postage for mailers and paid digital and social media advertising also qualify. However, the city drew a sharp distinction regarding website-related costs: website advertising means paid promotional placement on third-party platforms and does not include website hosting, design, development, maintenance, security updates or general IT work. Promotional materials paid for wholly or partially with lodgers’ tax funds must include the official City of Grants Lodgers’ Tax logo or include a sponsorship mention in cases such as radio advertisements.
Applicants must now submit a marketing plan showing how promotional activities support the Lodgers’ Tax Act’s purpose. Awards of $5,000 or less require a concise outline, while awards above that threshold require a comprehensive marketing plan for city review before contract execution. Reimbursement requests must include at least three high-resolution photos documenting the funded event, which may be used for future tourism promotion with photographer credit when applicable. Critically, organizations cannot incur costs and then seek reimbursement unless the award has been formally approved by both the board and City Council with written notice provided.
For outdoor hospitality operators who generate significant visitation through on-site events like rallies, themed weekends, outdoor recreation competitions and seasonal celebrations, the new prohibition on using lodgers’ tax funds for operational expenses underscores the importance of structuring event budgets with clear separation between promotion and execution. Properties that host rallies, festivals or themed weekends may need to adjust their funding applications to focus exclusively on advertising and outreach while covering staffing, entertainment and supplies through separate revenue streams. Creating distinct budget line items for marketing and advertising versus event execution costs improves both compliance and budget transparency. Developing promotional assets first and ensuring they meet branding or sponsorship acknowledgment requirements before production can prevent costly revisions. Tracking overnight bookings generated by specific events demonstrates the tourism impact of promotional investments, and building relationships with local tourism boards and lodgers’ tax advisory committees well in advance of funding application deadlines helps operators understand evolving requirements. Digital guest engagement platforms now allow operators to capture pre-arrival data including guest origin and booking source, which can support applications for tourism-focused funding by demonstrating visitor origin and marketing effectiveness.
Several board members expressed frustration that the new procedures and City Council action moved forward without sufficient board involvement or advance discussion. Board members believed they should have had a clearer role before the resolution went to council. City staff responded that the resolution had been presented previously in October with a board packet containing upcoming changes, and board members had opportunity to ask questions. Board members also expressed concern about whether their recommendations will be honored going forward, especially in cases where applicants later seek additional funding directly from City Council to circumvent the board’s decisions.
Board Chairman Aaron Dean allowed leaders from local nonprofits to discuss frustrations over how they will cover costs like insurance, cleaning and supplies if awards are now focused strictly on advertising. City Manager Andrew Valencia and Finance Director Victor Villalobos explained that those needs should be handled through separate contractual arrangements rather than through the promotional awards process.
The board tabled part of its discussion agenda to return to the issue later. The next Lodgers’ Tax Advisory Board meeting is scheduled for Feb. 26, 2026, and the city expects to implement a second funding round for events running May through September totaling $20,000. Organizations planning events during that period are encouraged to begin coordinating with the city. Under the new procedures, the board must meet at least six times per year.
Properties that can clearly articulate the promotional value of their events, separate from operational needs, tend to be more competitive in securing external funding support. For campground owners, RV park operators and glamping resort managers watching how communities like Grants structure their tourism funding, the broader lesson is clear: jurisdictions are increasingly scrutinizing how lodgers’ tax dollars are spent, and operators who position their marketing efforts with documented geographic reach and clear budget separation will be best equipped to access these resources.