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An Increase in Philadelphia Hotel Tax from 7% to 8.2% Likely to Help Fund
 the the Expansion of the Pennsylvania Convention Center

By Chris Brennan, Philadelphia Daily NewsMcClatchy-Tribune Regional News

Oct. 23, 2008 - Guests at city hotels will likely pay a little more for their stay starting in January to help fund the expansion of the Pennsylvania Convention Center and the agencies that promote it.

Legislation to increase the city's hotel tax from 7 percent to 8.2 percent cleared a City Council hearing yesterday and appears headed for approval soon. Mayor Nutter supports the idea.

The tax increase would raise an additional $6.3 million next year, with $2 million each going to the Philadelphia Convention & Visitors Bureau and the Greater Philadelphia Tourism Marketing Corp., and $2.3 million going to the Pennsylvania Convention Center Authority. The expanded center is scheduled to open in 2011. In 2013, the city will start receiving 3.5 percent of the money from the hotel-tax increase.

The state this summer passed legislation to allow an increase of up to 1.5 percent for the tax. Gov. Rendell enthusiastically signed that into law, saying that there would be no more state money for the center expansion. The price for the project has increased just this year from $700 million to $790 million.

The state will pick up $700 million of the cost, paid for with taxes collected on the profits of casinos opening around the state. Two casinos approved in December 2006 by the state for Philadelphia have been delayed by opposition from the city, neighborhood groups and gaming opponents.

Bill Fitzgerald, general manager of the DoubleTree Hotel, in Center City, and president of the Greater Philadelphia Hotel Association, urged Council to pass the tax increase. The Convention Center expansion is expected to draw larger groups and fill more hotel rooms in the city and region.

"A 1.2 percent tax translates into, on average, about $1.40 more per night per room," Fitzgerald told Council members. "This is an increase that we, as well as our guests, can live with."

Fitzgerald and tourism officials are enjoying a banner week for hotel bookings, with a large medical convention coming to town and World Series home games for the Phillies this weekend.

"It does help that it's these types of weekends that can show the results that it has on the city's economy," Fitzgerald said before testifying in Council.

The PCVB estimates that more than 7,000 people will visit the city during the World Series, booking 7,500 hotel rooms.


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