Hotel room tax revenue drops by 34 percent in the Fox Cities due to COVID-19
We have new numbers showing a major drop in hotel room tax being collected because of COVID-19, and hotels also falling behind in their ability to pay it forward to local municipalities.
This was discussed during a meeting Monday of the Fox Cities Area Room Tax Commission.
Some communities are also asking about imposing penalties against the hotels.
The first quarter room tax was due at the end of April.
It covers the months of January, February, and March.
The first two months were strong but then COVID- 19 basically, halted travel during most of March and just now, we're getting a glimpse of the financial impact.
From the construction of the Fox Cities Exhibition Center in downtown Appleton, to the Community First Champion Center in Grand Chute, projects like this were possible thru a room tax collected by hotels that make up the Fox Cities.
However the most recent report by the Fox Cities Convention and Visitors Bureau shows a drop in that revenue of 34 percent.
That's $191,744 less than last year, for the same period.
Plus a number of hotels are behind on paying anything.
"We had initially 11 hotels that did not pay, as of the deadline, but the payments are coming in," said Pam Seidl, Executive Director of the Fox Cities Convention & Visitors Bureau.
Five of those eleven hotels that missed the April deadline have since paid, but six others still owe money, including three in Grand Chute, one in Appleton, one in Neenah, and another in Kaukauna.
Seidl says it's expected room tax revenue during the second quarter could drop by 90 percent.
This covers April, May, and June.
Seidl added,"We lost a significant amount of revenue from sport tournament and convention group events and so, we're expecting second quarter to be the worst and hopefully we get a climb out."
Some communities like Grand Chute have recently imposed a one percent penalty for paying late, plus threats of suspending a hotel operator's license.
Kimberly officials are now considering similar actions.
Grand Chute Town Administrator Jim March said,"There's one or two that always seem to be hanging on by a thread. but we've twisted their arms behind their backs as hard as we can but maybe we will look to increase it even more."
As far as the projects funded by a hotel room tax, like ones we mentioned, Action 2 News has been told there's enough money in reserve funds to cover debt obligations even if no tax is collected thru at least next April.