Although sponsors of the Lancaster County Convention Center had anticipated annual increases in revenues from the hotel room rental tax, receipts through July have actually dipped slightly form the comparable period last year.
According to the Office of the County Treasurer, room rental tax income in 2011 through July amounted to $790,790.51 as compared to $791,309,05the prior year, a dip of $518.54.
As was recently pointed out at a Convention Center Board meeting by a hotelier in the audience, apart from new construction and certain exceptions, the hotels in the county are showing signs of age. This is in part due to lack of re-investment in renovations. A 5% tax has the same effect on patronage as a 5% rate increase. To the extent the prices are lowered to offset the tax or business goes elsewhere, the profitability of the hotels is undermined. Few hotels earn 5% on gross revenue.
Owners who are not making money are not like to be able to reinvest in their properties and financial institutions are not likely to provide loans. Thus the once vibrant Lancaster County tourist business appears to be in decline. One might say, we have killed the goose that laid the golden egg!
