New York City hotel owners are organizing against a city tax to contend with the drop in tourists following President Donald Trump’s trade tariffs.
The New York City hotel lobby is urging elected officials to cut the hotel occupancy tax rate by nearly half as owners struggle to pay the bills because of declining business, Gothamist reported.
The Hotel Association of New York City has proposed slashing the occupancy tax to 3 percent, from 5.875 percent.
The chance of lowering the tax may be slim. The surcharge raked in $238 million last quarter, according to a city comptroller’s office report.
The current rate was set by a 2008 bill backed by lawmakers that saw levying slight cost increases on visitors — not New Yorkers — as a necessary boon to the city.
The city’s hotel industry is still reeling from the pandemic. As of October, the city lost 6,000 rooms since 2019, half of them in Manhattan, according to JLL. Additionally, some 16,000 rooms were lost to migrant housing.
A special development permit enacted in 2021 also hampered hotel growth, with developers forced to undergo long and costly land use reviews, with 8,000 rooms stuck in construction purgatory.
Vijay Dandapani, CEO of the Hotel Association of New York City, told Gothamist that in the current economic climate, hotel owners are “afraid of what the future could look like.”
After two years of growth, travel from Canada, the biggest source of tourists to the U.S., fell by 12.5 percent in February and 18 percent in March. Trump’s tariffs on foreign goods and a threat to turn Canada into a 51st state have led to a steep drop in Canadian tourism.
Meanwhile, international flights into all three New York area airports have fallen, according to Crain’s New York Business.
The hotel industry launched a “StayNYC” industry campaign this month that highlighted the economic value of hospitality and the impact of a “whopping” occupancy rate.
Kaushik Patel, who owns three hotels in Long Island City, said business is down 50 percent since 2019. If the hotel occupancy rate were reduced, he told Gothamist, that would present “a huge saving” for tourists.
Amanda Farías, a council member from the Bronx, said that “reducing the tax rate is a smart, proactive step that will help boost tourism” and boost hotel occupancy.
“Tariffs absolutely have the potential to impact tourism, from currency fluctuations to the rising costs of consumer goods and experiences,” Farías said in a statement.
— Dana Bartholomew