Hotel Industry Statement: Keeping Taxes High will Keep Hospitality Workers Out of Work

NEW YORK, NY (10/30/2023) (readMedia)-- Today, the Hotel Association of New York City (HANYC) testified at a New York City Council hearing that tens-of-thousands of hospitality industry workers are still unemployed more than three years after the start of the pandemic due to City taxes that are much higher than other cities'. HANYC also called for a reduction in the City's Hotel Occupancy Rate, which is set to be renewed by the City, in order to increase hotel room stays and overall economic activity.

"Although tourism has ticked back up since the pandemic, the hospitality industry still has 20,000 fewer jobs and much less revenue because taxes and other challenges make it more expensive for visitors to travel here," said Vijay Dandapani, President and CEO of HANYC. "We will never recoup all the jobs and revenue lost without measures that make New York more competitive-including reducing hotels' tax burden, which is double that of other major cities'. Research shows that a two percent reduction in the occupancy tax would increase hotel stays by about 45,000 room nights per month, also increasing tax receipts for the City overall. Extending this tax rate at its current sky-high level will prevent us from recouping the jobs and revenue lost during the pandemic, and keep working people out of work."

The hotel and hospitality industries were the hardest hit parts of New York City's economy over the last year. More than 200 New York hotels closed during the pandemic, leaving tens-of-thousands of New Yorkers out of work. Before the pandemic, the hotel industry employed more than 50,000 people who are mostly immigrants and people of color, raised $3.2 billion a year in City tax revenue, and added $22 billion annually to our economy.

There are still about 20,000 hospitality workers unemployed, according to the City's Economic Development Corporation. Also, there are 10,000 fewer available hotel rooms in the city than in 2019 because of bankruptcies, high taxes, and migrants in shelter.

Meanwhile, major European cities and Asian cities, such as Tokyo, Seoul and Singapore, have fully recovered, according to Amadeus Demand360, the industry's international hospitality market intelligence platform. New York's main competitors – Paris and London – are now 79 percent and 35 percent, respectively, above their 2019 hotel occupancy numbers.

Lowering taxes would lower costs to hotels, which would lower costs to visitors, spurring new bookings and hirings, research shows. Hospitality industry-tracker Future Partners reported recently that travelers viewed New York as the least affordable destination out of the nation's largest 26 cities. According to an analysis done by a leading economist for HANYC, lowering the City's occupancy tax rate by three percent would increase hotel stays by about 45,000 room nights per month.

Lowering property taxes would also help bring the hospitality sector back. New York hotels pay double the property tax burden of other major markets.