Hotels seek to add surcharge

Huntington Beach’s hotel guests may have to shell out a little more in the near future, as the city’s hoteliers have proposed adding a 1% assessment to overnight stays to help cover promotion costs.

The hoteliers, who form one of the city’s three business improvement districts, hope to use the funds to advertise Surf City as a destination for groups — in particular, businesses that might want to book a hotel for a conference or retreat. Having those groups in town can provide a revenue boost, said Cheryl Phelps, general manager of the Hyatt Regency Huntington Beach Resort & Spa.

“It benefits everyone,” she said. “Once groups are here, they fill the restaurants downtown. They use the cabs. It benefits the entire community.”

The City Council must approve the proposal before hotels can raise rates. Donna Mulgrew, the vice president and chief operating officer of the Huntington Beach Marketing and Visitors Bureau, said the assessment, if passed, may take effect July 1.

Huntington Beach charges a 10% transient occupancy tax for hotel rooms, plus a 1% assessment that goes to the business improvement district. The proposed increase would bring the total surcharge for overnight guests to 12%.

Still, Mulgrew and the hoteliers don’t expect the increase to discourage travelers from spending a night in town. A 12% surcharge, Mulgrew noted, is equal to or lower than that charged by many Southern California cities — 12% in Laguna Beach and 15% in Anaheim, to name two.

She and Steve Bone, the bureau’s president and chief executive, expect the added assessment to bring in about $500,000 a year. Hotel revenues have lagged in Surf City during the recession, falling from $203 million in 2007 to $195 million in 2008 to $172 million last year, according to a study by Dean Runyan Associates.

“When hotels got hit, we got hit too,” Mulgrew said.

A business improvement district is a group of merchants who band together to raise money to market their services or fund improvements within their boundaries. Huntington Beach’s other business improvement districts consist of downtown merchants and car dealers.

The Marketing and Visitors Bureau, whose job is to promote Huntington Beach to outsiders, provides staffing for the hoteliers’ district. Phelps, the Hyatt’s general manager for five years, said she hoped the increased hotel revenues would aid the bureau’s coffers, which have dwindled in recent years.

“Now is not a time when we should be scaling down on marketing,” she said. “We should be out there luring people to Huntington Beach.”