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.
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