Tourists coming to San Luis Obispo will soon help pay for the city’s tourism promotion thanks to a unanimous vote by the city council for the new 2 percent assessment known as a ‘bed tax’ on hotel rooms.
The city already has a 10 percent transient occupancy tax on the lodging industry, but hoteliers championed the new ordinance, known as the Business Improvement District (BID), to control where the money is spent.
San Luis Obispo City Council member Christine Mullholland said she thought the assessment, which would add $2 onto a $100 hotel bill, wasn’t too much to ask of tourists.
“The 2 percent on rooms is still way below say what you pay in Monterey or San Francisco,” she said. “The hope is that it will increase tourism with added promotion and people will come here and spend their money on local businesses.”
Jamie Wallace, general manager of the new Courtyard by Marriott in San Luis Obispo, said the BID, which comes into effect August 1, sprang from necessity.
“Historically, occupancy for the city and the county has been flat if not decreasing,” Wallace said. “We’d made up for it with rates to increase revenue. However, there are . more hotels being built so it’s important that we promote the city as a whole. Tourism assessment is something for the good of everyone.”
Some hotel owners, though, feel that the new bed tax doesn’t benefit them directly enough.
“The money that is collected through transient occupancy taxes.hardly any of it goes back to the tourists or promoting of tourism,” Days Inn employee Pragna Patel said.
“We collect it and turn it over to the city government, and the city gets a tremendous amount because of it. A majority of the funds are spent on the city functioning because it goes into the general fund. They technically should spend more money on marketing tourism because that’s what bringing money in, but the city has decided to take the money anyway. What the BID is supposed to achieve is that the funds we collect from the tourists will be used specifically for marketing purposes.”
The BID affects only the City of San Luis Obispo now but it was originally slated to cover the county, a move that Pismo Beach and Paso Robles protested until it was scaled back to what it is now.
Patty Oxford, owner of the San Luis Creek Lodge, could not hide her disappointment at the change.
“I didn’t actively support this. We favored the county-wide proposal and I think we’ve lost time,” Oxford said. “The county-wide bid could have been in place a lot sooner had there not been opposition and we could have moved forward faster (and) would have gotten more bang for our buck. It just would have been a larger pool of money so we could have leveraged dollars better.”
On the other hand, Best Western Royal Oak’s general manager Naomi Henn was delighted that the BID was kept in the city.
“Pismo has the beaches, Paso has the wineries,” Henn said. “Let’s promote where our business is in San Luis Obispo.”
Debates about the countywide to citywide change are not the only discrepancies the BID faces. Although Mullholland said the council received only one letter of protest on the BID, hoteliers and tourists had a mixed bag of opinions when it came to the new assessment.
“I feel that (it) is extreme,” said Mark Marchesseault, guest services manager at the Apple Farm Inn. “I could understand a slight increase but an extra 2 percent is a bit (much) in my opinion. I’m sure people will notice and mention it.”
Apple Farm Inn guest Patricia Ruth said she did notice the increase in room prices at the inn.
“The tax is not really benefiting us,” said Ruth, a visitor from Murrieta, Calif. “Why should we pay for their advertising when we’re already paying for an expensive room?”
Ruth’s husband, Hans agreed, adding that “any tax is bad.”
Helen Robertson of Las Vegas was also staying at the Apple Farm Inn. She said she had mixed emotions when it came to the ordinance.
“I almost think they charge enough that $2 could come out of what they charge but it’s not a great big increase so I can see that too,” Robertson said.
Paula Thayer of Santa Maria said she was not surprised by the BID.
“I think all the hotels are hurting a little bit this time of the year because of the increased gas costs; people aren’t traveling like they used to,” Thayer said as she strolled around the Apple Farm Inn.
“It’s a shame that the tax is going up. I guess they would feel that if you can afford to stay in a place like this you can afford a couple extra dollars. It’s not that we like it but we can certainly understand it. Everybody’s hurting right now.”
Chalese Eddings, visiting from San Jose, was one of the few tourists who saw the tax as a good thing.
“If it helps the locals and the city I don’t see why it’s a bad thing; especially if the hotels are worth it,” Eddings said as she lounged by the pool at the Quality Suites. “I would want my city to do the same thing?”