Lodging tax revenue dipped $12M since March compared to 2019

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Published: Aug. 27, 2020 at 2:16 PM CDT
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MONTGOMERY, Ala. (WSFA) - Alabama saw about a $12 million dip in lodging tax revenues compared to 2019 from March to June, according to data from the state.

“We’ve never gone through something like a sudden, hard dip in travel that we experienced. That’s unheard of,” said Department of Tourism Deputy Director Grey Brennan.

Brennan has been in the tourism industry for 20 years. He said this major drop comes as groups and tourists halted their trips to the state during the shelter in place order.

“Tourism across the nation and particularly in Alabama has been damaged by what’s been happening,” Brennan said.

This revenue loss has had a crippling effect on some of Alabama’s cities that rely heavily on this revenue. The League of Municipalities Executive Director Greg Cochran said lodging taxes can make up for about 20% of a city’s budget in some cases.

“When you look at our larger in mid-sized communities that have lost business travel because of business restrictions,” Cochran said. “And you’ve lost conventions, and then tourism at the beach in coastal areas, it has had a profound effect on our communities,” Cochran said.

Cochran said of the smaller cities have been fine because they’ve been able to rely on revenues from grocery purchases and the online sales tax. But some cities may need to look at raising taxes or cutting services to stay afloat.

Cochran does not know of any current cities looking at raising taxes at the moment, but instead they are re-evaluating the government services they provide.

“I think all of our municipal officials, now that elections are over with, are going to be looking at the services that they’re able to offer, and how do they do that under these new budget constraints, if there’s budget constraints,” he said.

Even with the devastating loss, the deputy director said Alabama was not hit as hard as other locations. Alabama is listed in the best 10 markets in the nation in weekly travel spending for week ending August 15 in percentage, year-over-year change.

“As you can imagine Alabama is faring much better than Hawaii that you have to fly to, or even some of the other states that are concentrated in only big city destinations,” Brennan said.

Brennan said they are more concerned about the businesses that have shut down because of financial troubles.

“We’re looking at how it impacts our tourism, industry and jobs and people and places that they go to. That’s our concern,” he said. “We hope it all bounces back”

MonthLodging Tax revenue lost compared to 2019
June stays $1.8 million
May stays $1.4 million
April stays$4.71 million
March stays$4.2 million

Copyright 2020 WSFA 12 News. All rights reserved.

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