Hotel distress could strip NYC of $1.8B in tax revenue

The projected loss does not include property taxes, which are due July 1

The St. Regis Hotel at Two E 55th Street (Courtesy Cvent)
The St. Regis Hotel at Two E 55th Street (Courtesy Cvent)

The loss of tourism alone could drain New York City of $1.8 billion in tax revenue from hotels.

The estimated loss includes $968 million in room-occupancy taxes and $342 million in other taxes, Crain’s reported, citing research from Oxford Economics. Property taxes paid by those businesses — due July 1 — were not included in that figure. (Though the real estate industry has called for the city to extend the payment deadline, no such measure has passed the City Council.)

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Although hotels were allowed to operate during the pandemic, few travelers were looking for lodging during the widespread stay-at-home orders. As a result, some hotels closed temporarily, others closed for good — some to position themselves for conversion to office space. Other hotels have been in talks to serve as socially distant dorm rooms.

The city’s hotel occupancy reached a low of 15 percent in April, during the height of the pandemic. In June so far, it recovered to 45 percent, as tourism slowly crept back. Still, occupancy remains far behind the average for this time of year.

The American Hotel & Lodging Association, the lobbying group that commissioned the revenue study, is seeking a federal tax credit from Congress to incentivize tourism. [Crain’s] — Georgia Kromrei