San Luis Obispo sees increase in occupancy tax

Posted: May 4, 2012 5:41 PM by Cameron Polom, KSBY News
Updated: May 4, 2012 5:43 PM

You may have seen some new hotels popping up on the Central Coast. It's the reason one of the top ways San Luis Obispo makes money is on the up and up. The transient occupancy tax is money spent by people at local hotels that goes back to the city. It is 4th on the list of the top revenue generators for the city, behind sales tax, property tax, and utility users tax.

Over the past five years, the Central Coast economy has faced some tough times, but according to the latest numbers, one of our most important industries is on the rise again.

For the first time in five years, a new hotel will open its doors in the city of San Luis Obispo. Assistant City Manager Michael Codron says this is an important step to economic recovery.

The so-called bed tax collected from out-of-town visitors is vital to the area's development.

"It is an important portion of what the city uses to pave the streets to pay for police officers, for public safety in general to maintain infrastructure," Codron said.

It is infrastructure that keeps the downtown stores and restaurants bustling.

City officials say they've seen a 17 percent increase in tourist occupancy over the last year.

The latest addition is an 82-room Hampton Inn just off Highway 101 and Los Osos Valley Road. Amanda Cretcher, manager of the Courtyard Marriott across from the new building, says business is booming.

"We have a lot of big groups and corporate accounts that have been staying with us since we've been open especially with the new businesses opening in town we have those employees stay with us as well, so business is great," Cretcher said.

Three more boutique hotels in San Luis Obispo have been approved to move forward with construction and San Luis Obispo isn't the only city with hotels popping up.

San Luis Obispo's assistant city manager says the upcoming summer months will tell us a lot about how the local economy is recovering. He says tax revenues from both bed taxes and sales tax will be key indicators.