Last November, the city raised the hotel bed tax from 2% to 5.5% and earmarked funds from the increase (an estimated $5.3 million in 2023) for housing and child care initiatives, said Kara Franker, executive director of Visit Estes. Park, a local tourism group. That strengthened bed tax is now combined with city, county and state sales tax to add a cumulative 14.2% to the cost of an overnight stay in the city, he said, helping to fund a variety of utilities along with the new tax related to the labor force. initiatives.
According to Colorado tourism officials, at least 17 municipalities have imposed a new bed tax or modified an existing one over the past year, many of which have earmarked the revenue for new types of projects.
Similar moves are taking place in tourist-heavy areas of the US, said John Lambeth, chief executive of travel consultancy Civitas, reflecting a more expansive approach that «is more about destination management and give back to the community.»
Jack Johnson, director of advocacy for travel industry group Destinations International, said the disruptions from the pandemic have prompted some communities to consider whether broader social and economic policies «can be linked to travel in tourism, whether directly or indirectly, and therefore pay for them. out of bed tax.”
The more taxes states and cities impose on hotels, the greater the competitive disadvantage they create for local businesses.
Chip Rogers, CEO of the American Hotel and Lodging Association
Hotel taxes were first adopted in the US by New York City in 1946, became nationally commonplace in the 1970s, and is what guests often see listed on their hotel bills today, said Elizabeth Strom, an associate professor at the University of California’s school of public affairs. South Florida. Public officials have long loved bed taxes because they generate easy revenue to collect from outsiders, not local voters.
“Every state either has a tax of this type at the state level or allows such a tax at the local level, or both,” Strom said.
The newer breed of bed tax experiments, like those in Colorado, are being driven as much by windfalls from recovering travel demand as by evolving civic attitudes.
Tourism revenues have fallen dramatically during the pandemic, but by 2023, hotel-generated state and local tax revenues, which include lodging taxes along with other levies that lodging operators contribute to government entities, are expected to reach $46,710 million throughout the country, 13.6% more than in 2019. , according to a study by the American Hotel and Lodging Association and Oxford Economics.
Bed taxes already account for nearly half of the taxes generated by hotels in the US, the AHLA said, and it expects that bed taxes this year will likely exceed the $19 billion they generated in 2019.
In Florida, which has been battered by multiple hurricanes that battered beaches and islands, Broward, Collier, Lee and other counties are applying tourism revenue to rebuild and protect those travel assets, Johnson said. Litter taxes now help finance dune restoration, shoreline stabilization, erosion control and other coastal management activities, she said.
The change has raised some concerns in the hotel industry.
“In general, the more taxes states and cities impose on hotels, the greater the competitive disadvantage they create for local businesses, as potential hotel guests may seek other destinations with lower tax burdens,” said Chip Rogers, Executive Director of AHLA.
As for the industry-mandated fees that the Biden administration is examining, AHLA spokesman Curt Cashour said that only 6% of hotels nationwide charge «a mandatory resort, destination, or service fee, at an average of $26 per night,» adding that it «directly supports hotel operations,» such as staff salaries and benefits.
Cashour said AHLA continues to work with authorities «to ensure that the same standards for rate display are applied throughout the accommodation booking ecosystem» so that guests are not caught off guard.
Bed taxes can send extremely cost-conscious business and leisure travelers to lower-tax destinations, Strom said, “but if it’s a unique venue, I don’t think a few extra dollars a night in tax matters”.
«If people want to see the Space Needle,» he added, «they’re not comparing the cost of rooms in Seattle to the cost of rooms in Portland.»
Some major tourist destinations say they’re not worried about turning away tourists right now.
We want visitors who align with our economic and community goals: shop at local businesses, eat at local restaurants, participate in ‘voluntourism’.
Ilihia Gionson, public affairs officer for the Hawaii Tourism Authority
Hawaii, for example, is seeing a strong post-pandemic tourism recovery, even though its 13.3% state and county lodging taxes combine with 4.5% excise taxes to add about 18 % to hotel bills per night. State revenue forecasters expect only Hawaii’s bed tax to bring more than $785 million this year, up from $645 million last year.
Since attracting more tourists isn’t the main challenge, said Ilihia Gionson, public affairs officer for the Hawaii Tourism Authority, the agency is using some of the money it gets from hotel taxes to try to influence what kind of visitors attracts.
“The wheels were spinning before the pandemic and they sped up during the pandemic,” he said. “We want visitors who align with our economic and community goals: shop at local businesses, eat at local restaurants, engage in ‘voluntourism,’ and be mindful of their economic impact. So it’s less about ‘Come here’ and more about ‘This is who we are and what it’s about.’”
San Luis Obispo, along California’s central coast, is also putting some of its hotel tax revenue toward projects that officials hope will benefit the community.
