The effect of lodging tax increases on US destinations

Simon Hudson, Fang Meng, Kevin Kam Fung So, Scott Smith, Jing Li and Rui Qi
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Simon Hudson: 2629University of South Carolina, USA
Fang Meng: 2629University of South Carolina, USA
Kevin Kam Fung So: 2629University of South Carolina, USA
Scott Smith: 2629University of South Carolina, USA
Jing Li: 2629University of South Carolina, USA
Rui Qi: The University of Memphis, USA

Tourism Economics, 2021, vol. 27, issue 1, 205-219

Abstract: This study examined the impact of lodging tax increases on eight different destinations of the United States. Data were collected via in-depth stakeholder interviews and monthly statistics provided by Smith Travel Research including average daily rate, occupancy, and revenue per available room. Time series analysis was employed to estimate the impact of tax increases in each destination by analyzing that time series before and after the imposition of the tax. Overall, our results did not fully support the hypothesis that when a city’s hotel tax greatly increases above that of an easily accessible competitor, it will result in an economic loss to the city with the disproportionate tax rates. Hotels appear to have absorbed any tax increases with little impact to their businesses, but there was concern among stakeholders as to how the lodging tax was spent.

Keywords: destinations; hotels; lodging tax; tax increase (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:27:y:2021:i:1:p:205-219

DOI: 10.1177/1354816619890752

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