Moronomics -- tourism down, so states raise bed tax

empty terminal
empty terminal

The travel industry is reeling as Americans by the millions have decided to spend this summer on their butts rather than the road. So what are "enlightened" states doing to help out the floundering hotel business? Raising bed taxes to pick the pockets of people who are just passing through.

The country's hotel and motel occupancy rate was down over 11% year over year in April, consistent with results from previous months. Revenue per available room fell an even more dramatic 19.5%. Airline travel was off 6.3%.

Yet states that are reeling from tax collection shortfalls have chosen to soak out-of-town visitors to help balance their budgets, to the detriment of the lodging owners. Among the guilty states, according to USA Today, are

  • New York City, which now charges a 14.25% bed tax

  • Massachusetts, which raised the cap on local hotel taxes by 2% and the tax on restaurant meals from 5% to 6.25%.

  • Nevada, which means Las Vegas, raised room taxes by 33%, to 12%.

  • Hawaii now collects 8.25% bed tax, up 1% and due to go up another 1% next year.