Motels want to raise tax for tourism: Fees could begin in November
March 26, 2006
South Lake Tahoe lodging establishments are taking tourism matters into their own hands, pledging to impose their own tax on guests through a business improvement district that could take effect Nov. 1.
The date will come a day after Measure Z expires. The city-spawned initiative that gained voter approval in 2002 placed a $1.50 auxiliary fee on motel and vacation home-rental guests into the local government’s general fund.
At that time, the city grappled with budget deficits hovering over $1 million. Measure Z has raked in an average of $1.1 million annually from tourists who stay overnight in town, adding to the 10 percent and 12 percent in transient occupancy tax already collected from standard and redevelopment properties for the city.
A portion of the motel tax is intended to fund tourism efforts for the city. But with a diminishing marketing subsidy to the Lake Tahoe Visitors Authority – dropping from about $800,000 in 2001 to $225,000 in 2005 – many who make their living from tourism-based proceeds wonder: “What now?”
This is especially true when Las Vegas spends $178 million and Hawaii spends $69 million on annual tourism marketing budgets. The competition for tourism dollars has become steeper. South Shore room nights have been flat in comparison to other areas such as San Diego, which has posted occupancy levels at 68 to 72 percent in the last three years, while South Lake occupancy has dropped to 13 percent in midweek of some slow seasons.
“That kind of growth is what we want to see in this town,” Lodging Association President Jerry Bindel said, pointing to San Diego’s numbers on the screen.
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That was the basis of a presentation of the concept by the South Lake Tahoe Lodging Association hosted by Inn By the Lake on Thursday evening. The group needs buy-in from at least a majority of motels, hotels and property management firms that arrange vacation home rentals to have its fee-based district fly.
The 3- to 5-year proposal with the LTVA would kick off in November with lodging collecting $2 from hotel guests and $3 from vacation home renters and earmarking the money to support the LTVA’s current $2.2 million budget. It’s estimated $1.6 million a year would add to the LTVA operations – which by the time the tax goes into effect may include the lake’s tourism agency running the visitor centers for the South Lake Tahoe and Tahoe Douglas chambers of commerce. The two entities merged last week, backing a proposal that would turn the centers over to the LTVA.
The audience of about 40 people primarily from hotels nodded and viewed the presentation in a favorable light – with some questions illuminating the state of tourism here.
Greta Hambsch of the Accommodation Station stressed she’s all for promoting the area, but she also suggested lodging get a full view and accounting of where the LTVA plans to spend the money.
“If we all agree, I hope we have a marketing plan that would assume these dollars,” she said.
LTVA Executive Director Patrick Kaler invited all interested to get an update on LTVA activities at its marketing outreach meeting set for April 21 at 9:30 a.m. at Harrah’s Lake Tahoe.
The city formed a Tourism Promotion Business Improvement District a year ago to offset the diminished subsidies. The controversial effort reached a stalemate, following a legal challenge. Its board voted to disband the district.