The San Diego Lodging Industry
Association and the San Diego County Hotel-Motel
Association are developing a proposal to add a 2 percent surcharge
to hotel bills and use the revenue to promote the city.
“This speaks to the need for a new
funding model,” said Salvatore Giametta, vice president of
community affairs for the San Diego Convention and Visitors Bureau.
“Many of us feel the existing model is broken.”
Since 1993, the city of San Diego has
cut the CVB’s funding by $5.1 million, or 37 percent, appropriating
more hotel occupancy tax revenue for the city’s general fund. Mayor
Jerry Sanders has hinted more cuts are on the way.
Mike McDowell, executive vice president
and CEO of the Lodging Industry Association, who pitched the
proposal to a city council subcommittee in July, said the concept
of a Tourism Improvement District, funded by the surcharge, is also
a reaction to the 12,000 hotel rooms now in development in San
Diego, which could open by 2011.
“We’re faced with the rock that is the
city’s economic reality and the hard place that is the growth in
supply,” McDowell said. To keep occupancy at its current 73
percent, he calculates, the city needs to attract 2 million more
room nights annually.
If the city council endorses the plan
this fall, and the lodging community votes to levy the charge, the
total amount of taxes and fees on hotel bills would rise to 12.5
percent as early as next spring, still below the national average
for comparable markets, Giametta said. McDowell believes there will
be “no problem” gathering enough support to pass the measure.
The surcharge could raise $20 million
to $24 million annually. Half of the money would bankroll
organizations now funded by the city, leaving an extra $10 million
to $12 million to spend on marketing.