Oakland Jacks Up Hotel Fee to Trumpet Tourism

Visitors who book hotels in Oakland now have to pay a higher nightly fee to fund city advertising to convince more visitors to book hotels in Oakland.

The Oakland City Council unanimously approved an increase in the assessment on hotel stays that funds Visit Oakland, the city marketing arm, the San Francisco Business Times reported.

The nightly fee will go from a flat $1.50 per room to 2 percent of room rates — which could more than double annual assessment revenues, according to an economic analysis by the city.

By peeling off more fees from its highest room rates, Oakland’s new assessment is expected to rake in more than $3 million in its first year, compared with less than $1.2 million last year.

The assessment will run until 2034, longer than previous terms.

Before the change, a guest who booked a $773 Broadway Suite at the Kissel Uptown Oakland, run by Hyatt, would pay $1.50. The revised assessment would now tack on nearly $15.50.

Peter Gamez, CEO of Visit Oakland, pushed for the change and rallied support from local hotels. He said in a statement the new assessment will allow Oakland to compete “more aggressively” in markets around the country to lure both leisure and corporate business.

“This change came at an extremely important time for Oakland,” Gamez said. “While our results have been positive, we are still dealing with the impacts of the global pandemic.”

The assessment, formally known as the Tourism Business Improvement District, comprises 24 hotels in Oakland. More than 80 percent of them petitioned the City Council in favor of the increase, above the 50 percent minimum required.

Oakland is now dealing with the fallout of multiple scandals, including misreporting crime statistics during a period of rising crime and an FBI probe into the campaign finance dealings of Mayor Sheng Thao, who also faces a recall effort, according to the Business Times.

The exit of the Oakland Athletics to Sacramento next year will also impact visitor spending dollars.

The future of First Fridays, Oakland’s popular monthly food, art, and retail street fair, is in doubt because of rising costs, fewer visitors and competition from San Francisco’s Downtown First Thursdays.

Virginia-based Park Hotels & Resorts to shutter a 56-year-old Hilton hotel next to Oakland’s airport this month after a crime wave forced the closure of local restaurants.

Visit Oakland plans to hire more sales staff to boost market outreach. Other plans supported by the extra funds include partnering with a film coalition with the aim of bringing more projects to shoot in Oakland. Outreach will encourage more hotel stays during major sporting events.

Dhruv Patel, CEO of Alameda-based Ridgemont Hospitality and chairman of Visit Oakland, said the higher assessment could help boost small business, restaurants and cultural attractions — calling it an “investment in our entire community.”

— Dana Bartholomew