SANTA CRUZ -- A countywide lodging fee could soon rise to $2 per night under a deal that might be in place during the height of the summer tourism season.
The deal -- the result of internal talks among local resorts, hotels and vacation rentals -- increases a 3-year-old room fee that goes toward promoting the county's $600 million tourism industry. It doubles the rate on medium-sized hotels while bolstering the tax on larger destinations by a third.
"It's a nominal fee. We don't believe it has a direct impact on someone's desire to visit Santa Cruz," said Maggie Ivy, executive director of the Santa Cruz County Conference and Visitors Council.
The money won't increase the council's coffers, but will largely instead replace the anticipated loss of $572,000 in local government funding.
That revenue is disappearing under a 2012 deal with the lodging industry to restrict a voter-approved transit occupancy tax to 11 percent.
Overnight hotel stays rose 11 percent in 2011 and 6 percent in 2012, and Ivy said both were above industry averages. She said the tourism marketing district is paying off.
"The metrics that we're able to track are showing great results," Ivy said.
The fees are currently $1.50 for hotels larger than 30 rooms and $1 for places with six to 30 rooms. Small bed-and-breakfasts had been exempt, but they are included in the new fee proposal. The hope is to have the funding in place by the next fiscal year, which begins July 1.
Ivy said a survey showed 77 percent support among the lodging industry, though several different ideas were floated over time.
"The $2 was the option that got the most support," Ivy said.
But those results are weighted based on the number of rooms, giving large establishments such as Seascape Beach Resort strong influence over the results. Already, one smaller operator is objecting.
"The lower-income guest pays a higher percentage," said Gerald Eidam, for 35 years the proprietor of the Sunny Cove Motel. "They are our guests in the city and the county, and to gouge them or whatever you want to call it -- to overcharge them -- is not an all-right thing to do."
Eidam said the fee disproportionately affects less-pricey rooms, suggesting a more equitable course would be a tax rate. However, the county Board of Supervisors has already signaled its intent to adopt the law, and on Tuesday will hold the first of two public hearings on the issue.
Last November, voters in the city of Santa Cruz and the unincorporated county approved transit occupancy tax increases to 11 percent. Those fees are levies in addition to tourism fees, and were held down partly to remain competitive with similar rates in Monterey County.
Monterey County also levies tourism marketing fees, currently $2 per room or $1.50 for establishments that don't serve food or beverages. Both fees are higher in the city of Salinas.
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