Hotel taxes used questionably

by Elisse Miller

Hotel owners in Chula Vista discovered a self-imposed tax intended to increase tourism funding has been spent on the salaries for Chamber of Commerce members instead. The tax was established in 2009, when Chula Vista hotel owners decided to increase room rates by 2.5 percent, amounting to an annual intake of $400,000.

The extra funding was intended to enhance advertising and marketing for to attract more visitors to the city’s hotels. However, an investigation by the San Diego County Grand Jury found 72 percent of the money produced by the tax is used towards the salaries for the chamber’s staff.

Money for advertising was spent on local publications, which, by nature, are not meant to draw new visitors to Chula Vista.

Carl Winston, Director of the L. Robert Payne School of Hospitality & Tourism Management, does not find this news shocking.

“There is a history of hoteliers being unhappy with the way that hotel taxes are spent,” Winston said. “I’m not surprised there’s a battle, because cities are so desperate for money.”

Winston said San Diego has a 10.5 percent Transient Occupancy Tax. When it was initiated in the 1960s, 100 percent of profits went to promoting San Diego as a tourist destination, which decreased to zero in2007.

Twelve of the tax-paying hotels petitioned to dissolve the tax, but the process is proving more difficult than it was to initiate the tax. Because the taxes collected from these 12 hotels amounts to more than 50 percent of the total money raised, a public hearing will soon be held to find a solution.