The Lodging Tax Grants that are recommended by the Grant County LTAC to the Grant County Commissioners are funded through the Lodging Tax applied to overnight stays within Grant County. Most major, incorporated cities within Grant County have their own LTAC that provides grants also, as you are probably aware. The tax revenues for overnight stays within those cities go back to those city LTACs to disperse.
Likewise, any overnight stays within rural Grant County (i.e. Mardon Resort, Sun Lakes, PUD parks, and other non-city entities) generate lodging tax funds for the Grant County LTAC to disperse. Thus, the more overnight stays within rural Grant County, the more the LTAC funds received, and the more LTAC grants dispersed.
The basis of the question from the LTAC is how will this put more heads in beds that are in rural Grant County? It is not necessarily a disqualifier or requirement but merely a question to get a feel for the impact county-wide. Keep in mind, most incorporated cities have their own LTAC for promoting local tourism and overnight stays within their city.