Cape Cod Chamber proposes 1.5% hotel tax for tourism promotion

Proposed 1.5% tax would apply to revenues from stays at properties with 15 or more rooms. Proceeds would be used for tourism promotion: advertising, visitor incentives and workforce housing during shoulder seasons.

In order for the tax to become effective, Cape Chamber CEO Paul Niedzwiecki will need to sell the plan to the select boards of each Cape town and convince them to endorse it. If that effort is successful, for the tax to be implemented, 62% of affected lodging properties - about 165 hotels and motels - must petition the State to create a Tourism Destination Marketing District.

If created, this District would raise about $3.57M annually which would be spent:

• 60% on sales and marketing
• 25% on economic and community development, including workforce housing
• 8% on administration
• 7% for contingencies

Some hotel owners favor the plan because it seems to offer potential for more shoulder-season business - times when there are now always some empty rooms.

But skeptics of the plan argue that (1) labor shortages will make it impossible for hotels to service additional tourists, and (2) adding 1.5% to prices will be a disincentive for already inflation-burdened middle class families to vacation on the Cape.

Existing hotel taxes already add up to 14.45% of hotel revenue.

Will Mr. Niedzwiecki be able to sell the new tax? If so, will it work as intended? Stay tuned for updates.