Hotels agree to higher tax to boost New Orleans’ tourism advertising

Tourism advertising for Mardi Gras 2014
Tourism advertising for Mardi Gras 2014

New Orleans hotels will begin assessing an additional 1.75 percent tax on room rates in April to help pay for tourism marketing efforts worldwide and infrastructure improvements in the French Quarter.

The extra money should more than double the amount spent on advertising the city to vacationers.

The Tourism Support Assessment, voted on in an independent referendum conducted by the Greater New Orleans Hotel and Lodging Association, received the support of 95 percent of the votes cast in a balloting period that ended Feb. 21.

As a result, Orleans Parish hotels, with the exception of those in New Orleans East, will be able to add a 1.75 percent charge, or $1.75 for every $100, to their room rates beginning April 1. The money collected will go to the New Orleans Convention and Visitors Bureau, the New Orleans Tourism Marketing Corp. and the city.

“It is not easy for a hotel to accept additional charges,” CVB President and CEO Stephen Perry said. “This says a lot about the hotel community that it has rallied to participate in helping their city grow and improve.”

The Legislature authorized the hotel assessment last year, but it needed the approval of more than two-thirds of the roughly 22,000 downtown hotel rooms to be imposed. Each hotel had a number of votes equal to the number of its guest rooms. About 90 percent of downtown hotels — including those in the Central Business District, French Quarter, Warehouse District and St. Charles Avenue — participated in the vote.

Hotels will not be required to assess the additional charge, but Perry said he believed very few will opt out.

The tourism industry hopes the assessment will eventually amount to about $16 million annually, Perry said.

The money raised will be split three ways. The CVB will receive 0.75 percent of the 1.75 percent assessment to help attract conventions, international travelers and more airlines to New Orleans. Another 0.75 percent will go to the Tourism Marketing Corp. to promote the city to U.S. leisure travelers, including in distant markets the group has not had the money to advertise in before, such as New York and Chicago.

Together, the visitors bureau and the marketing corporation spent about $10 million advertising New Orleans last year. The new tax could provide an additional $14 million to promote the city.

The remaining 0.25 percent of the new tax will go to the city in a dedicated fund to help pay for public safety, infrastructure repair and quality-of-life improvements in the French Quarter, the heart of the city’s tourism industry.

The additional fee will raise the total hotel tax in New Orleans to 14.75 percent, noted David Teich, general manager of the Windsor Court Hotel and a member of the board of the hotel association. The city will go from having the 18th-highest hotel tax in the country to the 15th-highest, he said.

“It’s not like suddenly we’re the most expensive,” Teich said. “But it’s going to make a huge difference in the way we market. This money will enable us to spread our reach.”

New Orleans hotels have been contemplating the self-imposed tax since at least 2009, when an industry-commissioned study suggested ways the city could reach its goal of attracting 13.8 million visitors in 2018. About 9.1 million people visited the city in 2012, the last year for which data are available.