A new report from the American Hotel and Lodging Association says a billion dollars in hotel taxes will flow to Baton Rouge this year.
We spoke with Chip Rogers, AHLA CEO, about the importance of New Orleans’ hotel industry in helping to provide that money to the state.
“Well no question New Orleans drives most of the travel and tourism into Louisiana. But there’s a lot of other places that people enjoy. But in a city like New Orleans if something were to happen, and certainly things have happened in the past, you’re going to see that one-billion dollars impacted much more significantly than a larger state like a Texas, a Florida.”
Rogers says major events like hurricane Katrina and the COVID pandemic seriously curtailed hotel tax collection which New Orleans is only starting to recover from fully.
And while the money from hotel taxes statewide pour into Baton Rouge to be used anyway lawmakers want as it goes into the general fund, Rogers questions if hotel taxes are good for travelers.
“Hotel taxes have been around for quite some time, but they really been ratcheted up over that last few years, as lawmakers fall prey to this idea that ‘hey, I’m not taxing my own constituents, I’m taxing people from other states,’” Rogers says. “The reality is in most states if you at people who are staying at hotels, often times they are from that particular state, so you are taxing your own people.”
So it turns out hotel taxes are in fact ways states make money under the notion of charging out of state residents. While that may work for New Orleans, Rogers says it's quite a different metric when studied up close.
“Lawmakers cannot continually raise those taxes. It’s almost like an arms race and it’s ending up in everybody paying a whole lot more,” Rogers explains. “I remember looking at a study in the state of Georgia many years ago where they had thought they would tax people from out of state, and it ended up being more than 6-in-10 people that stayed in a hotel were Georgia residents.”
Rogers says hotel taxes work in a city like New Orleans where most guests are from out of state. However, the same is not true outside tourist centers. Roger maintains many guests staying in smaller communities are in-state travelers, and they being asked to pay the same state hotel tax.
