Hospitality & Tourism

Hotel, meal tax revenue increase in bright spot for hospitality industry

THE NEWS SEEMS GOOD for hoteliers like Win Baker, owner of the Abigail Stoneman Inn in Newport, as meal and hotel taxes through the first five months of the year increased 4 percent over the same 2009 period.
Posted 7/28/10

PROVIDENCE – Reflecting good news for the hospitality industry, the state said Wednesday it collected more meal and hotel taxes in the first five months of the year than the same period last year.

From January to May, receipts from meals taxes increased 4 percent over the same period in 2009 to $7.4 million, the R.I. Division of Taxation said Wednesday. Hotel tax revenue - excluding Newport - increased 9.25 percent to $569,266.

(The hotel tax numbers exclude Newport because the city collects its own hotel tax and sends the state’s share to Capital Hill. For all other municipalities, the state collects the hotel tax and delivers the local share to the municipalities.)

“I know that things are really moving in the right direction. People are feeling enthusiastic,” said Dale Venturini, president and CEO of the Rhode Island Hospitality Association.

The meals tax increase was similar to the jump between the first five months 2009 compared with the year prior, when revenue went up 3.3 percent.

The jump in hotel tax revenue contrasts with an 11.9 percent drop from January through May 2009 compared with the same five-month period in 2008. This year, hotels were filling more rooms but at lower rates, said Martha Sheridan, president and CEO of the Providence Warwick Convention and Visitors Bureau.

Citing data from STR Global, Sheridan said Rhode Island hotels had an average daily occupancy rate of 53 percent during the first five months of 2010 compared with 45.5 percent during the same months last year. The average room rate fell to $98.63 from $105.92.

And while rates may have fallen, Sheridan said they started relatively high to begin with, leaving more room for them drop as hotels competed to attract guests in a difficult economy.

Mother Nature has also provided a boost by delivering warm, rain-free weather. And the Warwick area received a bump as workers repairing buildings damaged by the March floods sought temporary quarters. The average daily occupancy in April hit 82.2 percent in the city, compared with 54.1 percent last April. In May the occupancy rate fell to 62.2 percent, still above last year’s 58.5 percent.

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