July 12, 2011--Downtown Seattle hotel owners want to add a $2-per-night room tax to fund advertising that would promote leisure travel to Seattle, particularly in the offseason.

Cuts in government funding -- including the closure of the state tourism office -- and a rash of "staycations" prompted hotel owners to seek the fee, which was expected to be announced Tuesday morning.

More than three-quarters of hotels that would be included already have signed petitions expressing support. The Seattle City Council could vote on the tourism-improvement district this summer.

The fee would apply to 53 hotels downtown and in Belltown, South Lake Union, the Chinatown International District, Pioneer Square and part of Capitol Hill. Hotels with fewer than 60 rooms would be exempt.

The $2 fee would be on top of the 15.6 percent tax Seattle hotel guests already pay in sales taxes and a room tax. The 7 percent room tax goes toward paying off debt on the Washington State Convention Center and advertising the city as a business-convention site.

The new fee would raise about $5 million to $6 million in 2012 to fund promotion, supporters say.

"Hotel stays, especially leisure business, is all discretionary, so that takes the biggest hit," said Howard Cohen, president of the Seattle Hotel Association.

While hit by a decline in visitors because of the economic downturn, hotels locally also have seen a drop in Japanese tourists after their nation's March earthquake and in visitors from the South and Midwest after tornadoes there, said Cohen, who manages two Best Western hotels near the Space Needle and the Sixth Avenue Inn.

"This industry is huge for Seattle," said City Councilmember Tim Burgess.

Government funding for tourism promotion has been slashed in recent years. The state's elimination of the Washington State Tourism Office makes Washington the only state in the country not to spend money promoting tourism.

Seattle contributed about $50,000 this year to Seattle's Convention and Visitors Bureau for promotion, but that money is expected to be cut from the city budget next year.

"I think traditional sources of funding tourism in many cities and many states is changing dramatically," said Tom Norwalk, president and CEO of the visitors bureau. "We're really using something that's been adopted widely around the country."

The new fee would make Seattle's taxes and fees on hotel rooms among the highest on the West Coast, according to the National Business Travel Association. In San Diego and Portland, for example, hotel guests pay 12.5 percent. In San Francisco, they pay 15.5 percent.

A City Council analysis showed for a $150 room, guests would pay 16.6 percent with the new fee.

Mayor Mike McGinn said he supports the fee in part because the industry is offering to tax itself.

"They see the value in the ability to promote Seattle as a destination," he said.

The new money would market Seattle as an offseason destination. A committee would determine how to spend the money.

Tourism is not a problem during summer months, said Norwalk. The new marketing would advertise the city's food and wine scene, cultural events, holiday shows and activities like that, he said.

"We have many, many cultural activities," said City Councilmember Jean Godden. "We were having Picasso last winter ... We don't have harsh winters. Sometimes we have a little bit of rain, but it's usually misty and light and not gullywashers by any means."

Seattle's tourism industry is on the rebound after a low point in 2009.

In 2010, 9.3 million overnight visitors booked hotel rooms in King County, versus 8.8 million in 2009. Visitor-generated state and local tax revenue was up 8.4 percent in the county in 2010, as well, according to the Convention and Visitors Bureau.

Emily Heffter: 206-464-8246 or [email protected]

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