Is the room tax really having a significant effect on tourism?

It occurs to me that the cost of gasoline, meals, admissions to activities, etc., are the biggest part of the cost of a vacation, much more so than the cost of a room. Does a 10% room tax add even 2% to the cost of a vacation in Lancaster County? I’d think that it would have less effect than airlines adding an $8 charge for checked luggage, which would affect destinations like Disney World.

And we’re obviously not the only community with a room tax. Is our tax higher or lower than average?

It would seem to me that there are two categories of visitors to Lancaster County. I don’t know if it’s true, but if I were visiting the Convention Center, I would want to stay at the Marriott or Brunswick hotel, but if I were planning to see Thomas the Tank Engine, see something at AMC or Sight and Sound, etc., I’d really rather stay anywhere else than downtown. From a fairness standpoint, it seems fair to ask only downtown hotels to support the convention promotion agency, and fair to ask only the other motels in the county to promote general tourism in the county. I know in some communities, they’ve used a restaurant tax to support their convention centers, but that tax targets locals, not those using the convention center facilities.

You’d be in a better position, Mr. Field, to have this kind of data, and you need to quote statistics to back up your arguments, or else it “look” like your arguments are as self-serving as Lancaster Newspapers shameless promotion of government subsidies to build the convention center.  I would like to think you’re better than that.

Editor’s response:

Clearly the severe recession is an important factor in the drop off of tourism.

Since NewsLanc’s sibling companies have no hotel interests in LancasterCounty, we do not feel our positions on the Hotel Room Sales Tax or the Convention Center Project is “self serving.”

We agree and have stressed the point in the past that the downtown hotel market is distinct from the suburban markets. That remote hotels in the county would not benefit from the Convention Center was one of the basic arguments in the hoteliers’ lawsuit.

Adding a tax to any product de facto increases its price, which in turn diminishes demand for the product.   Alternatively, the tax must be absorbed by the seller, in which case profitability is compromised.

In both cases, it is inevitable that the real estate assessments will be lowered with the result of less taxes being collected to the detriment of the community.

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2 Comments

  1. Note that the number of room nights sold in Lancaster City and County has remained flat over the entire ten years since the “hotel tax” has been enacted. Admittedly there have been two recessions during that time, but there were also several years of relatively healthy economic growth. Whatever the “hotel tax” has been doing for overnight tourism, it most certainly has NOT been helping.

  2. Everything you write is self serving. Whether it’s openly obvious or not. Maybe that’s why you don’t have the balls to sign the things you write or allow open discussion on these boards.

    Editor’s note: NewsLanc‘s policy is not to print names of contributors except for official government communication and press releases.

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