More on Hotels and the Benefits of the Tourist Trade

We are starting to work on an update to the Local Comprehensive Plan.  We are also discussing the future of the tourist trade in Dennis.  We need to think about the many benefits that the tourist trade brings to the town.  And we must decide whether these benefits off-set the costs of this industry.

Hotels are one of the contributors to the local budget of revenues that are not capped by Proposition 2 1/2.  Hotels are taxed for their property value at the local land value rate and are also levied a tax on the revenue collected for the use of the rooms in the hotel.  The state has established that hotel room revenue can be taxed up to 4% of total revenue.  Thus the tax collection on hotels are quite significant.  They are tied to overall economic conditions.  And are limited by how we approach the ability of the hotel industry to meet the needs of the traveling public.

In 1997, hotels contributed about $66,720 in rooms tax revenue to Dennis.  In 2002 this increased to $89,480 (these figures are based upon the reported hotel revenue in the Census Business Survey for the two years and the 4% rooms tax levy).  This total tax value increased by 34% over those five years, or about 6.8% annually.  This increase was without significant improvements being made to the product delivered to the customer.

As we consider the future of hotels, and the viability of creating a new Hotel Resort Zoning District, we should think about these contributions to the town.  Hotel customers also add value to many other businesses in town.  Over the coming weeks I will try to gather information on multiplier effects for their spending in other support industries.  Obviously the food service industry is directly impacted.  However, many other retail purchases are also linked to the hotel industry.  As many long term seasonal residents, and many now permanent residents started as guests staying in our hotels, we ought to think about their value as we guage the future of our hotel industry.