De Blasio, Eyeing Tourism Recovery, Eliminates Hotel Tax for Summer

reprints


Mayor Bill de Blasio has announced a three-month tax holiday for New York City hotels beginning June 1, in an effort to prop up the city’s struggling hospitality and tourism industries, which pandemic travel restrictions have battered for more than a year. 

Hizzoner signed an executive order today eliminating the 5.875 percent hotel room occupancy tax rate from June 1 to Aug. 31. A press release from the mayor’s office argues that the move will help hotels keep their doors open, after at least 150 New York City hotels shuttered during 2020

SEE ALSO: The Brooklyn Navy Yard Wants to Appeal to Creative Office Tenants

Revenue from the hotel occupancy tax is down 89 percent compared to fiscal year 2020, underscoring how badly the pandemic has damaged the city’s tourism economy. The leisure and hospitality sector lost 275,000 jobs from March to December of 2020, putting many hotel employees — particularly unionized workers at large Manhattan hotels — out of work. The city hopes that the tax holiday will allow hotels to lower their room rates and improve occupancy as tourists return to the Big Apple this summer. 

“As our COVID rates continue to plummet and we continue to drive a recovery for all of us, tourists will be coming back to New York City in droves. We’re ready for them,” de Blasio said in a statement. “By eliminating the hotel room occupancy tax for this summer, we’re accelerating our economic recovery, saving jobs and providing relief for one of our hardest-hit industries.

The move also benefits the city’s politically connected hotel trades union, which donated heavily to the mayor’s presidential campaign and might be getting a special permit in exchange. 

“This executive order is welcome news for tens of thousands of hospitality workers and for New York City’s tourism industry, which has endured the worst economic impacts of the pandemic,” said Rich Maroko, president of the New York Hotel & Motel Trades Council. “This tax relief serves as critical encouragement for hotels to reopen to guests from across the world.”