Hotel tax ticks higher

Even as the lodging industry enjoys a rebound, Connecticut hotels and inns are steeling for an increase in the state hotel tax they fear could impact reservations.

Despite a 16 percent decline in June, hotel room occupancy tax collections increased 9 percent for the 2011 fiscal year ending last month, according to the Connecticut Department of Revenue Services.

Entering July, the tax on rooms jumped from 12 percent to 15 percent, while the tax on a rental car popped to 9.35 percent from 6 percent before. While the latter hike is unlikely to have a major impact on Fairfield County, given it has no major airport, venues fear the room tax plus a slight increase in the overall sales tax could dampen business even as it is ramping back up.

The increases come even as Gov. Dannel P. Malloy moved to spur tourism in other areas, increasing the state”™s budget and reconstituting Bradley International Airport”™s governance in an attempt to draw airline flights.

“An increase in the hotel tax in this environment is going to affect consumer behavior, and we think negatively for the state of Connecticut,” said Peter Millones, general counsel of Norwalk-based Priceline.com Inc., in testimony earlier this year on various tax proposals before the Connecticut General Assembly.

Entering July, Fairfield County”™s hotel landscape continued to change, as the Holiday Inn Downtown Stamford converted to a Sheraton as Starwood Hotels & Resorts Worldwide Inc. readied to relocate its headquarters here from White Plains, N.Y. The Stamford Plaza & Conference Center hooked up with the Crowne Plaza brand of Intercontinental Hotels Group, with renovations to follow. And amid its own renovation, the Stamford Marriott Hotel & Spa found a tenant for its former rotating restaurant ”“ a temporary office suite operator.

Entering the summer, employment in Connecticut”™s hospitality sector was up by an estimated 1,500 jobs from a year earlier, a 1.4 percent gain. The Connecticut Department of Labor does not include in those figures jobs at the Foxwoods and Mohegan Sun casinos in the eastern part of the state, instead tallying those as government jobs due to the employers being federally recognized Indian tribes. Slot revenue was down at both casinos in May, with Mohegan Sun reporting a 6 percent drop from a year ago, and Foxwoods and its adjacent MGM Grand casino a 3 percent decline.

Still, U.S. hotels saw profits increase 10 percent in 2010, according to the PFK Hospitality Research division of Colliers International, which was quick to caution that only chipped into the cumulative 38 percent loss they absorbed the previous two years. Luxury hotels have led the comeback, PFK added, registering a one-third increase in profits compared to just a 0.3 percent gain by budget hotels.

Entering the July 4 holiday, the U.S. hotel industry experienced increases in all three key performance metrics tracked by STR Global, as occupancy increased nearly 6 percent from a year ago on average. Average daily rates were up 4 percent to more than $100, and revenue per available room ”“ a key measure for the industry ”“ was up 10 percent to nearly $68.

Miami and Tampa, Fla., had two of the top three occupancy increases in the nation; New York City was one of four markets to top 80 percent occupancy, with Denver tops in the nation on that front. San Francisco hoteliers enjoyed the best increase in revenue per available room, at 36 percent to $122.