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Thursday, Oct 6, 2022
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Hotel Self-Assessment Plan Clears First Hurdle

A plan that could raise as much as $30 million for tourism funding has apparently garnered enough support to get it rolling by January.

David Peckinpaugh, president and chief executive officer of the San Diego Convention & Visitors Bureau, said Oct. 3 that he’s learned that 54 percent of hotels within the city limits recently approved a measure that would impose a 2 percent assessment on nightly room rates.

According to state law, the creation of a marketing district with the authority to assess fees, such as the tourism marketing district plan floated more than two years ago, needs a vote of 50 percent of the businesses that would be affected. It must then have the blessing of a city or county governing body.

The approval process is the first step toward triggering the vote.

Under the proposal, ConVis would receive 50 percent of the revenue collected, while the San Diego North Convention & Visitors Bureau would receive 10 percent and the remainder would be split among several other organizations, including the Pacific Life Holiday Bowl, which are currently receiving hotel room tax funds.

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Peckinpaugh says he expected that the City Council would review the matter in mid-October, after which the hotels would vote to accept or reject the plan. The hotels’ votes would be weighted on the basis of how much they contributed in room tax revenue, and only hotels with 70 or more rooms would be assessed.

Members of the San Diego Lodging Industry Association and the San Diego County Hotel-Motel Association are backers of the proposal.

Based on average occupancy and room rates at the city’s hotels, it’s anticipated that the revenue collection would be from $25 million to $30 million in the first year and could increase annually.

The city’s 10.5 percent hotel room tax collection, which amounted to $151 million in the fiscal year that ended in June, would stay in place, but speculation is that City Hall would eventually keep the lion’s share, if not all, of those tax funds.

For fiscal 2008, the city had projected that the room tax revenue collection will be $164 million. That tax was originally established in the 1960s to fund tourism marketing, but City Hall has siphoned more and more of it for its general fund needs through the years.

For fiscal 2008, which began in July, ConVis has a budget of $14.6 million, of which $8.8 million comes from the city in the form of a subsidy via the room tax collection. The remainder is derived from private sources, primarily dues.

Since fiscal 2004, the bureau has seen its total subsidy slashed by 37 percent.

, Connie Lewis

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