Could Overall Tourism, Tax Revenue Jump by Raising Hotel Room Tax and Investing New Revenue?

Dec 30, 2019

Hotel room costs would rise two dollars for a $100 room if room occupancy tax proposal goes through, generating more revenue for tourism promotion and investment.
Credit Chris Bolt/WAER News

What are the pros and cons of raising the tax Onondaga County collects from people staying in local hotel rooms?  That’s the question county lawmakers are considering, after County Executive Ryan McMahon and Visit Syracuse asked for a jump in Room Occupancy Tax. 

A proposal calls for the tax to jump from 5 % to 7 %.  Legislature Chair Dave Knapp can see how it might help grow local tourism.

“Number 1, help Visit Syracuse promote the area; number 2, make some investments in our infrastructure.  We’re looking to make some partnerships from a multi-sports facility to an e-sports facility, a huge, growing area right now, to help create more room nights for our hotels.”

County Legislature Meets Dec 2, 1:00 pm @ County Courthouse

Knapp says most hotel costs in the Syracuse area are cheaper than other major cities in Upstate New York.  Legislator Casey Jordan, however is a little more reluctant to give up that competitive advantage.  But he can see where the additional Room Occupancy Tax would be helpful.

Hotels in Downtown Syracuse and the surrounding area are a bit less expensive than other major Upstate cities.

“Certainly I think it’s better to be funding these promotional activities with ROT revenue than with property taxes or sales tax revenues, but it’s a gamble.  If we’re advertising more, is it really going to be bringing in more revenue to justify that now we’re less competitive with other areas of the state?”

He’s also somewhat skeptical that investments into new places to attract tourists, such as a multi-sport or e-sports complex really work.  If raised, the room tax would generate an estimated $2.5 million more in revenue, where a new complex might cost $35 million to build.  Jordan notes the Lakeview Amphitheater did not increase tourism or taxes as much as hoped.

“I don’t really know if our other ventures into venues have really given us the payback or the revenue increase that we were expecting.  So I’m a little bit skeptical as to whether these assumptions are well-founded and whether we’re going to be realizing these increases in convention business and tourism business.”  

But Knapp still sees it as an investment to make the area more attractive.  So money raised in room taxes, then used to bring more tourism, helps in other areas.

“We pretty much run our government on sales tax.  So whatever we can do to help increase and generate more sales tax, which is what these facilities do, they’d have the effect of generating more sales tax as well because people are going to eat; they’re going to shop; they’re going to buy gas.  So it all has a nice snowball effect.”     

If the county approves the measure at its meeting Thursday, it goes to the state legislature for permission to raise the tax.  

This story has been edited with copy corrections.