Tourism continues to flourish along Oregon’s coastline and with that success comes efforts by some communities to double down on tourism related investments that can further drive their local economies. The City of Seaside is a prime example of a local government doing it right by proactively engaging their lodging operators at the front end of lodging tax increase discussions.
Due to the success of lodging sales, lodging tax revenue in Seaside has gone up substantially, resulting in double digit increases the past several years. In order to build off that success, the City has proactively reached out to lodging operators about a sizeable renovation to the Seaside Convention Center.
“For the most part our larger hotel and motel properties are very supportive,” said Seaside City Manager, Mark Winstanley. “We have been in discussions about a two percent increase in the tax. All of that money would go towards debt retirement of the facility.”
By focusing on debt retirement, the City would be able to move forward with a desired $15 million renovation of the convention center to add capacity and further expand tourism performance.
“We have been encouraging local governments to reach out proactively to their local lodging operators to discuss tourism investments as a first step,” said Greg Astley, director of Government Affairs for the Oregon Restaurant & Lodging Association (ORLA). “That commitment is playing out in Seaside which we hope other cities will learn from.”
Lodging tax creep across Oregon is something being tackled as a top tier advocacy priority for ORLA. The association recently opposed a lodging tax increase proposed in the City of Beaverton due to a questionable claim that a new Center for the Arts would drive tourism traffic and justify an unprecedented new four percent tax on operators inside the city limits. The city also illustrated a lack of engagement with local lodging operators to obtain support for this coveted center.
“The lack of direct outreach by the City of Beaverton to lodging operators located inside the city limits is shameful,” said Jason Brandt, ORLA’s President & CEO. “There is no proof or data available to suggest the proposed Beaverton Center for the Arts will have a ‘substantial purpose of driving tourists’ to the City of Beaverton.”
State law requires that 70 percent of all increases in tourism taxes be used for tourism promotion or tourism related facilities. The City of Beaverton plans to spend the new four percent tax on the Beaverton Center for the Arts, which seems to fail the test of being labeled as a tourism-related facility. Currently, there are no lodging operators in Beaverton supportive of the increase in lodging tax to help pay for the construction of the arts center.
“The contrast between Seaside and Beaverton in their approach to lodging operators is evident,” said Brandt. “On one hand you have a city proactively reaching out to their lodging operators to confirm an increase in the lodging tax would benefit their businesses and the tourism economy. This outreach ultimately led to general support from operators for the increase and investment plan. On the other hand, you have a City pushing through a lodging tax increase with no lodging operator support on an investment that is deeply questionable in regards to its ability to actually generate substantial tourism traffic.”
If you are aware of lodging tax creep in your community, please contact us at Advocacy@OregonRLA.org.