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Bed tax not rising with tourism

Photo by Janelle Patterson Clearing lunch items Tuesday at the Riverfront Bar and Grill in the Lafayette Hotel, Bartender Stacey Cole, says she sees often sees couples and friends journey to the hotel from northern Ohio just to eat a meal in the same spot where David McCullough ate when visiting Marietta this spring.

While tourism attendance in local museums has spiked this summer, primarily attributed to the May release of David McCullough’s “The Pioneers,” the same surge is not yet surfacing in one revenue stream for local governments.

Deana Clark, Marietta-Washington County Convention and Visitors Bureau executive director, explained Tuesday that while local hoteliers are reporting a higher occupancy rate, the average daily rate is down.

“In layman’s terms, more rooms were sold, but for lower rates, resulting in a decrease in bed tax, unfortunately,” said Clark.

Clark said those preliminary numbers of lower revenue were for the second quarter, encompassing April, May and June, but she doesn’t yet know if hotel revenues rose throughout the remainder of the summer.

The CVB draws approximately 80 percent of its operating budget from the city hotel/motel tax, also known colloquially as the bed tax, each year. The bureau could be adversely affected in its capacity to market the area’s tourism if the revenue projected and budgeted for is not reached each year.

“In speaking with a few of our hotel managers about the second quarter, they relayed that even though occupancy rates were higher, the Average Daily Rate (ADR) had trended lower than last year,” Clark explained. “ADR for many of the hoteliers is set by their corporate revenue managers. Almost always, there is corporate oversight or influence. Mostly it is set due to supply and demand, and local competition.”

At the Lafayette Hotel Tuesday, front desk staff reported their current range from $75 per night for a full-size bed, to $90 for a larger room.

Across hotels within city limits Tuesday, rates advertised online ranged a one-night stay between $46 and $96.

Marietta Assistant Safety-Service Director Bill Dauber said Tuesday that despairing might be premature though as the city and CVB head into budget planning for 2020.

“For accuracy’s sake, we won’t get a read on the revenues to conservatively predict from until August numbers are in,” said Dauber. “We have an internal committee between Auditor (Sherri) Hess, Treasurer (Cathy) Harper and myself that will meet after we get those numbers to get a gauge on tax revenues so far and predict through the final quarter.”

But the city estimates, Dauber said, were conservative for bed tax revenues both for the city’s general fund and the CVB for 2019.

“So when the (bed tax) brought in more than what was projected last year we were well within the right spot, that’s probably going to tie into this year too,” said Dauber.

The CVB currently receives one-third of the bed tax revenues from the city for its annual operating budget, though, in past years, that split has ranged from half to five-twelfths of the 6 percent hotel/motel tax.

Dauber cited the drop in the oil and gas industry between 2015 and 2017 as the reasoning behind past city council’s shift in distribution, noting the city take goes directly to the general fund for operational and personnel requirements of the city.

The Ohio Revised Code only requires that the municipality allocate a minimum of 1.5 percent to its local CVB.

The city administration will begin its budgeting process with city council in the final quarter of the year, to then be voted upon by the newly elected legislators on Jan. 1.

Janelle Patterson can be reached at jpatterson@mariettatimes.com.

By the numbers:

• Local rates advertised for a one-night hotel stay range currently from $46 to $96.

• The 2019 projection for the hotel/motel bed tax revenue within Marietta city limits is $743,938.

• The city portion to the general fund is projected to draw $495,959 this year.

• The Marietta-Washington County Convention and Visitors Bureau is expected to garner $247,979.50 this year.

Source: Bill Dauber and Times research.

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