June 18, 2020
WASHINGTON, D.C.—As a result of the sharp drop in travel demand from COVID-19, state and local tax revenue from hotel operations will drop by $16.8 billion in 2020, according to a new report by Oxford Economics released by the American Hotel & Lodging Association (AHLA).
Hotels have long served as an economic engine for communities of all sizes, from major cities, to beach resorts, to small towns off the interstate—supporting job creation, small business opportunities, and economic activity in states and localities where they operate. Hotels also generate significant tax revenue for states and local governments to fund a wide array of government services. In 2018, the hotel industry directly generated nearly $40 billion in state and local tax revenue across the country, according to AHLA.
Some of the hardest-hit states include California (down $1.9 billion), New York (down $ 1.3 billion), Florida (down $ 1.3 billion), Nevada (down $1.1 billion), and Texas (down $940 million). These tax impacts represent the direct tax revenue decrease from the severe drop in hotel occupancy, including occupancy, sales, and gaming taxes. These figures do not include the potential effects on property taxes supported by hotels (nearly $9 billion).