By CBJ News Staff
news@corridorbusiness.com
Iowa has lost a total of $239.3 million in state and local tax revenue, according to a new report by Oxford Economics released yesterday by the American Hotel & Lodging Association (AHLA).
The bulk of the loss – $163.6 million – comes from the gaming industry followed by lodging, with $142.7 million in lost revenue. The state has also lost nearly $6.3 million in personal income tax revenue, $4.75 million in sales tax and $2.3 million in corporate tax revenue.
The report found that nationwide, the sharp drop in travel demand due to the COVID-19 pandemic has caused a $16.8 billion drop in state and local tax revenue from hotel operations alone.
“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” said Chip Rogers, AHLA president and CEO in a statement. “Hotels positively impact every community across the country, creating jobs, investing in communities, and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more. However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery. We expect it will be years before demand returns to peak 2019 levels.”
Hotels have long served as an economic engine for communities of all sizes, AHLA officials said, supporting job creation, small business opportunities and economic activity in states and localities where they operate. Hotels also generate significant tax revenue for states and local governments to fund a wide array of government services. In 2018, the hotel industry directly generated nearly $40 billion in state and local tax revenue across the country.
According to the report, hardest hit states include California (-$1.9 billion), New York (-$1.3 billion), Florida (-$1.3 billion), Nevada (-$1.1 billion) and Texas (-$940 million).
Currently, more than 70 percent of hotel employees are laid off or furloughed. This year is projected to be the worst year on record for hotel occupancy, and experts estimate it will be at least 2022 before hotels return to their 2019 occupancy and revenue levels. While leisure travel is slowly starting to resume, six in 10 hotel rooms remain empty, with business travel not expected to fully rebound for two years.
Prior to the pandemic, the AHLA said hotels supported one in 25 American jobs — 8.3 million in total — and contributed $660 billion to U.S. GDP. CBJ
