Portland considering hotel tax hike to promote tourism

Portland considering hotel tax hike to promote tourism »Play Video

PORTLAND, Ore. -  The City Council on Wednesday will consider a two percent hotel tax hike intended to help promote Portland tourism.

The proposal would increase Portland’s tax rate to 14.5 percent and would only apply to hotels with 50 or more rooms. If approved, the tax is expected to generate more than $6 million a year.

It would be up to the hotels to decide how the money is spent but the intent is to promote overnight stays in Portland, especially for folks within driving distance of the city.

Last year Portland’s economy picked up $3.8 billion from tourists.

The competition in the hotel business isn't just across the street. It's across the country. So when Seattle recently raised hotel taxes to pay for a marketing campaign, Embassy Suites General Manager Steve Jung took notice.

"We're all fighting for tourism dollars, and I think when they have the ability to market as they're doing, that puts them at an advantage," he said.

Now Jung is pushing Portland's two percent hotel tax hike as a way to advertise the city, especially along the Interstate 5 corridor.

"We want to continue to make sure that Portland is front of mind for people in Seattle and in Vancouver," he said.

Hotel managers say getting more people to Portland won't just help them fill their rooms, it will also help car rental companies get more customers, restaurants sell more appetizers and entrees, and it will help local stores in the spring and summer when they can't count on holiday sales.

Of course, hotel guests don't like paying a higher tax but many say they won't be kept away because of an increase, especially considering Oregon has no sales tax.

The tax would last at least five years. If it doesn't work, the city could get rid of it in 2017.

In comparison to other cities, Portland is lower with its hotel taxes even if it is raised by two percent.

According to Travel Portland, Denver has a rate of 14.8 percent; Austin, 15 percent; and Seattle has a rate of 15.6 percent.