Virus Could Cost Governments $17 Billion in Hotel-Related Taxes

The collapse in travel demand that has accompanied the coronavirus pandemic will cost state and local governments $16.8 billion in tax revenue this year, according to an analysis released Thursday by an industry group.

The revenue losses will hit hardest in California ($1.9 billion), New York ($1.3 billion) and Florida ($1.3 billion), while Nevada ($1.1 billion) and Texas ($940 million) will also suffer, the American Hotel & Lodging Association said. Hotels in 2018 generated $40 billion of state and local tax revenue, the group said.

• The forecast by Oxford Economics included occupancy, sales, gaming, and income taxes, but not excise tax, fees, and property taxes. Potential indirect effects on property taxes paid by hotels could add nearly $9 billion to the revenue drain, the forecast said.
• “We expect it will be years before demand returns to peak 2019 levels,” AHLA President Chip Rogers said in a statement. He described the pandemic’s impact on the travel sector as being “nine times worse than 9/11,” and called for “support to keep our doors open and retain employees as we work toward recovery.”