Tourism and hotel officials are asking New Castle County and municipalities to set aside one percent of the recent local lodging tax for promotion efforts.
The Delaware General Assembly granted New Castle County and municipalities the right to impose a tax of up to three percent. The county, facing a budget crunch, quickly added the tax, with less fiscally challenged Newark and Middletown following suit.
The tax becomes effective on Dec. 1.
According to hotel industry trade groups (Delaware Hotel and Lodging Association, and the American Hotel and Lodging Association), the three percent levy will add to the current state of Delaware Lodging Tax of 8 percent, bringing the cost to guests to 11 percent.
The Destination Marketing Association for New Castle County (Greater Wilmington Convention and Visitors Bureau) has requested each of the leaders in Newark, Middletown and New Castle County to direct a portion of this new tax to the bureau to help fund marketing efforts to offset the negative impact on travelers to our region. The bureau is awaiting a response.
The tax was opposed by the Delaware Hotel and Lodging Association, with the bureau not taking a position on the issue.
Hotel occupancy rates have been stable in the county and officials fear the added tax could put the area at a disadvantage to Philadelphia and Baltimore in gaining meeting business. The two metros have more amenities and attractions than northern Delaware, although lodging taxes are comparable.
Delaware allocates a portion of its lodging tax to local convention and visitors bureaus. However, the New Castle governments refused to make a similar allocation in their efforts to gain room tax funds.
Lodging taxes are popular with governments seeking to squeeze out more revenues since the levy does not directly come from taxpayers. Larger metro areas have used car rental and lodging taxes in the construction of stadiums and arenas.
In the case of Philadelphia, a lucrative stadium deal helped make Eagles owner Jeffrey Lurie into a billionaire.
ToWilmington already has a two percent lodging tax that does not set aside a percentage for tourism.
