SANTA CRUZ -- The local lodging industry is still hashing out a proposed fee increase on hotel rooms, but representatives say they expect to have a deal in place by the end of next month.
The deal would supply a quarter of the funding for the county's main tourism agency, the Santa Cruz County Conference and Visitors Council. It is needed to replace $565,000 in government funding that disappears this summer.
"We need a little more time to look at what the structure of the fee would be," Council CEO Maggie Ivy said. "Nobody is saying the gap is not going to be bridged."
A deal on a fee increase was not expected to be controversial, but some smaller overnight lodges have apparently balked at how the fee is being applied. According to Proposition 26, two-thirds of the local industry must approve any increase, with votes weighted according to number of rooms.
The expected increase is the result of a deal between the tourism and lodging industry and the county and city of Santa Cruz, and is aimed at keeping local lodging taxes down.
Earlier this year, industry leaders objected to a proposal to increase local transient occupancy taxes to 12 percent, which cash-strapped local governments sought to help meet increasing costs.
Instead, the industry sought and won a compromise 11 percent increase. In exchange, local hotels offered to raise what are called tourism marketing district fees that also help fund the Visitors Council, while the county and city would keep money that previously went to fund the tourism agency.
County and city voters approved the 11 percent level in November.
Currently, local hotels with six to 29 rooms add $1 per night to customer bills, while those resorts with 30 rooms or more add $1.50.
Knights Inn owner Dilip Patel, president of the Santa Cruz County Hospitality and Lodging Association, said a series of discussions are set for January about how the increase would be implemented, but he was otherwise tight-lipped about what the debate was.
"It's pretty classified right now," Patel said.
But he did say hoteliers would consider adding a third tier. He also said he was confident a deal would be reached before the Visitors Council's public funding disappeared in July.
"It's going to be wrapped up by the last week of January," Patel said.
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