Hotel tax could be ‘tough sell’ in Albany
Gov. Cuomo”™s no-new-taxes policy is not stopping several municipalities in Westchester from seeking a local hotel tax as they look for new sources of revenue while the economy struggles to recover. The municipalities ”“ including Harrison, Mamaroneck, Sleepy Hollow, the town of Greenburgh and six incorporated villages within Greenburgh ”“ all want to enact a 3 percent room occupancy tax, and that has the county”™s hotel executives feeling, well, like they need a vacation.
“The misconception is that the bread and butter of our business is people coming up from the city on the weekend to use the pool,” said Dan Conte, general manager of the Westchester Marriott in Tarrytown and president of the Westchester Hotel Association, which represents 31 hotels, inns and conference centers in the county. “Our bread and butter is business travelers. You have to think of a company booking thousands of room-nights a year, and I sometimes lose business to a competitor over one or two dollars in rate,” said Conte, countering the argument by towns and villages that the tax would only amount to $3 on every $100 spent on a room.
Conte said though there has been some increase in transient guests, demand from the large groups that use meeting rooms and catering services still has not recovered from the recession. “And for hotel operators that is 30 to 40 percent of our business,” he said.
Revenue and employment in the hotel industry are down nearly 30 percent, Conte said. And more companies are giving up leased office space in the county than are moving in each year, a seven-year trend in the commercial office market that has left Westchester with six million square feet of vacant office space and has left the county”™s hotels with fewer business guests.
“The hotel association wants to emphasize that when a company chooses to relocate they take all this into consideration – the hotels that are available in the area and how much they cost. It flies in the face of logic trying to develop business on the one hand and raise taxes on the other,” Conte said.
In Rye Brook, which in 2010 was the first village in the state to enact a local hotel tax, Mayor Joan Feinstein said the tax on guests is “a way of not losing residents to other states or municipalities” by overtaxing their properties. She said the extra revenue the village draws from 820 rooms at the Rye Town Hilton and Doral Arrowwood Hotel Conference Center “is really helping” with roads resurfacing and other infrastructure improvements. The mayor said Rye Brook has collected $633,000 from the tax since its adoption in November 2010.
“I certainly don”™t want to hurt business, but we”™re up against a tax cap this year and that doesn”™t come with relief from unfunded mandates,” Feinstein said.
Tarrytown Mayor Drew Fixell said a portion of the tax proposed there would be dedicated to tourism and business development. Tarrytown has estimated it will collect $300,000 to $350,000 annually from the tax on 479 hotel rooms in the village. One-sixth of that revenue would be for tourism and business development.
“We really can”™t afford to spend on promoting tourism,” Fixell said. “But this tax would establish a dedicated steam of revenue tied to the amount of business being done in the town.”
In addition to Rye Brook, the cities of Rye, New Rochelle and White Plains have adopted a hotel tax after making a home-rule request to the state legislature. But Albany legislators are less likely to approve such requests in the new political reality shaped by Cuomo.
Assemblyman George Latimer, the Rye Democrat who sponsored Rye Brook”™s home-rule bill two years ago and is sponsoring a similar bill for Harrison this year, said the hotel-tax measure “is going to be a tough sell.”
“The governor says no additional taxes, so we will have to make the argument of why we need this,” Latimer said. “Well, there is a property tax cap in place and they”™re looking for other sources of revenue.”