Buffalo, N.Y. (WBEN) - A proposal in Albany would allow the City of Buffalo to impose a hotel bed tax of up to 5%. Those in the hospitality industry say it will hurt business.
"I can only give you the cons of this particular topic," said Mark Dorr of the New York State Hospitality and Tourism Association.
Dorr says if that tax goes in, Buffalo would have the third-highest overall tax rate in the country.
"For someone buying a hotel room, and for me and my family coming out for one or two days, oftentimes, you don't look at that monumental tax on on top of your hotel bill. However, with the convention and tourism business with your sports teams that come in, they're buying multiple hotel rooms, some might measure in the hundreds, the groups look at that overall costs, and say, 'Hey, we can go somewhere else and save tens of thousands of dollars by doing that,'" Dorr said.
He warns groups will soon catch on, and the tax revenue that's already being generated will start to dwindle, making it very tough for the Buffalo economy.
Dorr says there's already a little bit of contraction in travel looking out to the end of this summer and early fall, because inflation is starting to take hold of some families' incomes.
Patrick Kaler of Visit Buffalo Niagara also sees no pros, just cons, with the proposed tax.
"This will pose a challenge for us," said Kaler with WBEN. "We're already challenged in the downtown core, with 500 rooms being offline from the Buffalo Grand. This will get the attention of those planners who do look at what those additional fees and taxes are put onto an overnight stay for their attendees."
State Sen. Sean Ryan issued the following statement, voicing his displeasure with the proposed hotel tax:
“The looming fiscal crisis facing the City of Buffalo is the product of years of short-term fixes where sustainable revenue generation methods were needed. Balancing the budget on speculative revenue sources is not a sustainable long-term plan. The proposal faces intense opposition from major stakeholders in the hospitality and tourism industry, and for good reason. Adding another 5% onto the countywide occupancy tax would create the third-highest bed tax in the nation just in time for the busy travel season. This additional cost would put Buffalo hotels at a competitive disadvantage and drive tourists to hotels outside of the city. It is a recipe for disaster for a city whose tourism numbers are just now recovering from the pandemic. The City needs to go back to the drawing board and engage all stakeholders. More importantly, we need to make sure we’re not putting another Band-Aid on a city budget that requires more strategic solutions. I will not be advancing a new bed tax in the State Senate this year.”
Fillmore District Councilman Mitch Nowakowski says he acknowledges objections to a proposed hotel tax in Buffalo, but the city needs to find a way to generate revenue.
He adds Erie County currently collects a hotel tax, keeping the money and using it to fund the Convention Center and Visit Buffalo Niagara to promote this region.
"The City of Buffalo doesn't collect anything. But mind you when we provide police, fire, EMS, infrastructure, we have to come up with where you can come and entertain and stay in the city, and that we also get some form of revenue sharing to pay for the services that the City of Buffalo has to provide when people stay in our city," Nowakowski explained.
Nowakowski adds while state lawmakers must approve it, there are still kinks to be worked out.