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Bed-tax Logic

August 21st, 2008 · 2 Comments · Destination Marketing

Bed TaxSpeaking as a private citizen of both Clinton County and the City of Plattsburgh, I’ve got some thoughts about the recent decision to implement an Occupancy Tax on all people who utilize our local lodging.

Rationale:  Based on “gut feeling”, any losses due to the additional charge will be offset by increased demand generated by “promotional” efforts.

So, the legislators and those that have convinced them, believe that this incremental charge will have no impact on the price elasticity of demand.  I have yet to see a real scientific analysis of the impact of Occupancy Tolls on lodging demand that isn’t doctored by questionable interests.

Why should only lodging bear the burden of tax collection?  Who will enforce?  Who will provide oversight as to how that money is spent?  (The same folks that provide oversight for the money being spent now? Ha!)

Prediction: Watch for an “Economic Impact” study which touts the “success” of the local chamber’s efforts to boost tourism.  Likely by SUNY Plattsburgh’s Techinal Assistance Center.

Taxing Logic: “Every other county does it, we should do it too”.

Similar logic is in play up in Essex county where they want to increase the sales tax because “it is mostly paid by outsiders.”

I hate that and when my kids want something and tell me that all their friends “do it”, I have a similar reply.  So what?

Our recent influx of Canadian tourists has absolutely nothing to do with promotion or marketing done by any local organizations.  Only now that “somebody” has been harping about missing the Canadian boat has any real marketing north of the border been done.  The Canadians are coming down for one simple reason – PRICE.

The recent strengthening of the Canadian Dollar has made those up north realize that there money is better spent here.  Lower prices, cheaper gas, less taxes. When I say “less taxes”, remember, I’m sitting here in New York State.  If the Canadians think that it is a “deal” here, imagine what it is like up there.  When they tell me that “the gas is so cheap here”, I simply agree and tell them to have a great trip.

In the last decade or so, the Canadian government has invested/subsidized their tourism industry to a massive degree.  So much so, I almost consider it unfair competition.  Well, guess what?  They are sucking wind now.  American travel north is at record lows, their own citizens are choosing foreign destinations.  If this was a bike race, now is the time to upshift and PUT THE HURT on them.

Rather than increasing our tolls, we should be reducing them.  Rather than taking advantage of the increased demand by raising prices, we should be offering Canadian discounts.

But no, the geniuses “in charge” would rather continue to milk the cow with no thought to sustainability.  With the massive leakage and loss of exports happening up north, it won’t be long before disposable income takes a hit.  While I have seen huge numbers of Canadians in recent months, never have they not welcomed a coupon or “deal”.

Local lodging operators are resigned to the fate of being tax collection agents for the Chamber of Commerce.  Further, they are ambivalent about the efficacy of past, present, and future marketing efforts.   At least that’s my conclusion from casual conversation.  I’d love to hear otherwise.

Today’s “Press” editorial just echoes the inane justifications.

“…the beauty of the bed tax is that it will be paid, for the most part, by people who don’t live here, and it won’t hurt property-tax payers.”

I don’t know where they get their expertise in economic theory or destination marketing.  It’s not surprising that they would support a regressive tax which is paid by those without representation.  Why not call it a “Resort Fee”.  Heh.

“The legislature took a big step — even a historic one, as chamber president Garry Douglas said — in advancing the promotion of tourism and marketing for the county, and we eagerly await the fruits of that decision.”

I wonder what fruit he is refering to?

While I commend the Chamber for maneuvering itself into this windfall, I can’t help but wonder where we will be if the US dollar suddenly strengthens or the Canadian dollar drops.

Really, why not just build toll booths around the county?

Don’t get me started on that airport business.

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2 Comments so far ↓

  • John Warren

    In Warren County, our bed tax was met with the same kind of arguments. It hasn’t hurt tourism in the county (or certainly a lot less than reelecting Bush did ).

    Seriously, no one even notices except the local organizations and events that now have the funds necessary to keep their events running, attract new participants with better developed events, expand their marketing reach, etc.

    Despite all the whining from the business community, the Warren County bed tax can be considered nothing but a huge success, by any objective measure.

  • TourPro

    I guess I’ll take that as a qualitative vote of Yes for Occupancy Taxes.

    Lake George aka Warren County is enjoying a current boom for sure. Whether it can be placed at the feet of the Occupancy Tax, we’ll never know.

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