Visitors bureau gets a better cut

June Casagrande

Answering the cries of a veritable who’s who of the local business

community, the City Council has agreed to give the Newport Beach

Conference & Visitors Bureau a bigger cut of the hotel tax.

Though staff recommended a moderate increase of the bureau’s

current slice of two local taxes, council members considered pleas of

bureau Executive Director Marta Hayden and others.

“At that rate, by the time we get to 2 1/2 years, we’ll be out of

money,” Hayden told council members Tuesday.

A parade of business leaders from hotel, restaurant, tourism and

other industries echoed her request, pointing to fierce new

competition from new hotels in neighboring cities such as Huntington

Beach.

“The competition is fierce and it’s only getting worse,” said

Linda Mongno, vice resident of Hornblower Cruises and Events.

The bureau contracts with the city to help promote tourism, bring

in convention business and keep hotel rooms full. In return for this

service, the city pays the bureau a portion of the transient

occupancy tax -- the tax charged on hotel room stays -- and also a

portion of visitor service fees. In past years, that has come to

anywhere from 13.5% to 17% of those taxes going to the bureau.

The move council members approved Tuesday will simplify that

formula and stabilize bureau income by paying a straight percentage.

Staff recommended setting the new percentage at 16.5% with a cap at

$1.9 million a year. Business leaders asked for 18% in the coming

year, 19% next year and 20% the year after.

Council members took a middle road by approving an 18% cut with no

annual cap that’s subject to yearly reviews that could increase or

decrease the percentage. In the coming year, that will raise the

bureau’s estimated income from $1,337,600 to $1,462,583.

Mayor Tod Ridgeway objected to the bureau’s request because its

leaders resisted the idea of raising the hotel tax and instead just

asked for a larger portion of it. Bureau leaders argued that higher

taxes on hotel rooms could defeat the purpose by weakening Newport’s

competitive edge. Ridgeway, however, had to leave the meeting before

the late-night vote to catch a plane.

Councilman Don Webb suggested a slightly smaller increase: 17.5%.

But in Ridgeway’s absence and with Webb’s dissenting vote, the

remainder of the council approved the 18% increase.

* JUNE CASAGRANDE covers Newport Beach and John Wayne Airport. She

may be reached at (949) 574-4232 or by e-mail at

june.casagrande@latimes.com.