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Bill Would Raise NYC Hotel Tax

NEW YORK CITY-A proposed occupancy tax increase, the first in 14 years, draws opposition from the city's hotel association.

By Paul Bubny | Updated on December 10, 2008

NEW YORK CITY-The city’s tax on hotel rooms would increase from the current 5% to 5.875% under City Council legislation introduced Tuesday. The measure, which has been endorsed by Speaker Christine Quinn, is intended to help pay for city services. However, a hotel group says a tax hike would devastate the city’s tourism industry.

“Our industry is already grappling with a 20% decrease in hotel revenue over last year, in November alone,” says John Fitzpatrick, president and CEO of the Fitzpatrick Manhattan Hotel and the chairman of the Hotel Association of New York City, in a prepared release. “This tax increase, on top of the 14.54% our customers already pay” in the form of other state and local taxes in addition to the room tax–”is a lump of coal in a holiday stocking that will drive visitors away. The net result will be reduced revenue for the city and the state and increased job losses at hotels and the businesses we support.”

In the release, the association cites an analysis conducted by Sean Hennessey, CEO of Lodging Advisors. Hennessey’s data projected that even a 1% increase on the hotel tax would cause a loss of more than $533 million in room sales and associated visitor spending, 3,716 jobs in the hotel industry and businesses supported by hotels and more than $162 million in wages at hotels and businesses supported by hotels.

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