Destinations face tax decline due to tourism downturn

Estimated 2020 tax declines represent the direct tax revenue decrease from the severe drop in hotel occupancy, including occupancy, sales and gaming taxes. Photo credit: iStock / Getty Images Plus / Chainarong Prasertthai

In 2018, the hotel industry directly generated nearly $40 billion in state and local tax revenue across the country. But due to the COVID-19 travel decline, state and local tax revenue from hotel operations is expected to drop $16.8 billion this year, according to a new report by Oxford Economics released by the American Hotel & Lodging Association.

Click here for all of Hotel Management's COVID-19 coverage  

Some of the hardest hit states include California (down $1.9 billion), New York (down $ 1.3 billion), Florida (down $ 1.3 billion), Nevada (down $1.1 billion) and Texas (down $940 million). These tax impacts represent the direct tax revenue decrease from the severe drop in hotel occupancy, including occupancy, sales and gaming taxes. These figures do not include the potential, significant, knock-on effects on property taxes supported by hotels (nearly $9 billion).
 
“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association. “Hotels positively impact every community across the country, creating jobs, investing in communities and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more. However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery. We expect it will be years before demand returns to peak 2019 levels.”

Suggested Articles

Champions For Better Business assists hotels with the logistics of removing furniture, fixtures and equipment as part of a renovation or conversion.

After launching in North Carolina, the brand will expand into Virginia, Tennessee, South Carolina and Texas.

Nomadix PBX aims to help hotels upgrade outdated equipment, meet new safety requirements and save money each month.