City Council Passes Hospitality Promotion Bill
FOR IMMEDIATE RELEASE
(PHILADELPHIA, PA) Thursday, December 13 2012 – City Council passed the Hospitality Promotion Bill, introduced by Council woman Reynolds Brown, which will generate additional revenue to support the promotion of the Philadelphia tourism economy.
In 2008, the Commonwealth of Pennsylvania enabled the City of Philadelphia to levy a tax of up to 1.5% of the booking of hotel room(s). At the time, the City opted to set the rate at 1.2%. The Hospitality Promotion Bill will increase the rate to 1.5%. The remaining 0.3% will be divided evenly between the Greater Philadelphia Tourism Marketing Corporation (GPTMC) and the Philadelphia Convention and Visitors Bureau (PCVB), yielding an estimated $1 million per year for each organization to help bring additional visitors to Philadelphia.
The increase will help offset a dramatic decline in funding from the Commonwealth of Pennsylvania (see attached). Together, the organizations (GPTMC/PCVB) have lost approximately $10 million annually from previous levels, threatening Philadelphia’s ability to compete for valuable tourist dollars. The bill will add .50 cents to the price of an overnight hotel stay but will not affect Philadelphia’s 11th place ranking of effective tax rates among the nation’s 25 largest hotel markets. The new hotel tax rate will be 15.5%, still lower than New York (16.03%), Los Angeles (15.57%), Chicago (16.39%) and Houston (17.0%).
The tourism industry generates more than $9 billion per year in regional economic impact and supports 88,000 jobs; 52,000 jobs in Philadelphia alone. From 1997-2010, overnight visitation to Greater Philadelphia grew six times faster than the national average, according to the U.S. Travel Association.
“The numbers do not lie; the success stories are not a coincidence. We know that for every dollar we spend to promote Philadelphia it generates$100 in visitor spending at local businesses - plus $5 in tax revenue for the City of Philadelphia. The corporate world would classify that as a hit,” said Councilwoman Reynolds Brown. “Philadelphia is to culture and tourism what Detroit is to the automobile industry. It means jobs, paychecks and growth for our economy, so it behooves us to take whatever steps are necessary to keep our economic engine running at full speed.”
The bill will take effect July 1, 2013.