Phila. set to raise hotel tax; revenue will promote tourism

Posted: December 19, 2012

Hotel guests in Philadelphia can expect to pay 50 cents more a night next summer in the least controversial tax increase in recent times.

Mayor Nutter is expected to sign a bill, passed by City Council last week, that would raise about $2 million a year for marketing the city's tourism industry, an investment backers hope will pay for itself and then some.

The money would be split evenly between the agencies primarily responsible for selling Philadelphia to the outside world - the Greater Philadelphia Tourism Marketing Corp. (GPTMC), which focuses on the leisure traveler, and the Philadelphia Convention and Visitors Bureau, which handles sales and marketing for the Convention Center.

The extra money would come as the city continues to climb the ranks of destinations for all kinds of travelers, and as state dollars devoted to promoting tourism have dropped from more than $6 million before the recession to almost nothing.

"It's really significant for us," said Meryl Levitz, president and chief executive of the GPTMC. "It does keep us in the game. Philadelphia is in a very competitive media market."

The Nutter administration supported the bill, which would raise the hospitality promotion tax from 1.2 percent to 1.5 percent. The new law would take effect July 1.

The increase raises the overall hotel tax to 15.5 percent but would not affect the city's 11th-place ranking for hotel tax rates among the nation's 25 largest hotel markets.

The 50-cent increase is based on the city's average hotel room rate of $168 a night.

The bill's sponsor, Councilwoman Blondell Reynolds Brown, said every dollar spent on promotion leads to $100 in visitor spending and $5 in city tax revenue. Tourism generates more than $9 billion for the regional economy and supports 52,000 jobs in the city, she said.

Levitz said the money her organization receives would be plowed back into the popular "With Love" marketing campaign, targeting the East Coast.

Jack Ferguson, president and chief executive of the Convention and Visitors Bureau, said the new funding would go toward efforts to attract trade groups and international consumers.

"That's very important that those dollars are there," he said. "In the convention business, there are so many destinations."


Contact Troy Graham at 215-854-2730 or tgraham@phillynews.com, or follow on Twitter @troyjgraham.

 

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