May 19, 2021
NEW YORK—Mayor Bill de Blasio today signed an Executive Order eliminating the 5.875% hotel room occupancy tax rate for a three-month period, from June 1, 2021 to August 31, 2021. The relief provided by the tax rate reduction is designed to help accelerate the recovery of the hotel industry, which has been particularly hit hard by the pandemic. This executive action will help hotels keep their doors open, retain jobs, and gain a more stable footing as the city continues its path toward a full recovery.
“As our COVID rates continue to plummet and we continue to drive a recovery for all of us, tourists will be coming back to New York City in droves. We’re ready for them,” said Mayor Bill de Blasio. “By eliminating the hotel room occupancy tax for this summer, we’re accelerating our economic recovery, saving jobs and providing relief for one of our hardest-hit industries.”
The dramatic decrease in tourism and business travel due to the pandemic has had a significant impact on the hotel industry. The stresses on the industry are evident in a number of key indicators, including substantial decreases in jobs, inventory, and occupancy rates. Revenue from the hotel room occupancy tax is down approximately 89% as compared with Fiscal Year 2020, further demonstrating the pandemic’s impact on the industry.
This Executive Order comes on the heels of NYC & Company’s $30 million “NYC Reawakens” marketing campaign, which seeks to highlight the vast attractions in New York City and bring back the tourism industry. NYC & Company forecasts 36 million visitors to New York City in 2021 and the tax rate reduction will complement the multi-faceted effort underway for a successful restoration of the leisure and hospitality sector, which has suffered the loss of approximately 257,000 jobs from March through December 2020. By eliminating the 5.875% hotel room occupancy tax, hotels could lower the cost of their rooms, which will increase demand and recapture some of the lost ground on room occupancy.
“It is undeniable that New York City’s hotel industry, which welcomed tens of millions of tourists and business travelers before the pandemic, suffered tremendously as travel halted. As the City’s Recovery for All continues to gain momentum, this targeted and temporary tax reduction will provide wind at the backs of the hotel industry, helping put more New Yorkers to work as they roll out the red carpet for all who seek accommodations, whether for leisure or business,” said Department of Finance Commissioner Sherif Soliman.
“COVID-19 has devastated the hotel industry. It is critical that we lend a helping hand to help an industry that is very dependent on tourism, and eliminating the hotel room occupancy for the summer season is a good step. I want to thank the Hotel Trades Council and the Hotel Association of New York for their advocacy on this issue,” said Council Speaker Corey Johnson.
“Every action that will set up New York City to come back stronger represents more opportunities for New Yorkers to get back on their feet. Those disproportionately impacted by COVID-19 work in the hospitality industry and live in my district. This tax relief will help bring in much needed revenue to the hospitality and tourism industries,” said Council Member Francisco Moya.
“Our hotels are more than just a place for business and travel—they are job creators and economic drivers for our city. The economic downturn and lack of tourism has severely impacted these previously packed destinations, leading many to close permanently. Thank you Mayor de Blasio for providing relief for hotels in order to help our hotels stay on their feet and open, until travel returns to normal,” said Council Member Keith Powers.
“This executive order is welcome news for tens of thousands of hospitality workers and for New York City’s tourism industry, which has endured the worst economic impacts of the pandemic,” said Rich Maroko, President of the Hotel Trades Council. “This tax relief serves as critical encouragement for hotels to re-open to guests from across the world. HTC thanks Mayor de Blasio for his leadership in helping our industry and our city get back on its feet.”
“The temporary occupancy tax waiver is a much needed lifeline that is strongly welcomed by the beleaguered hotel industry,” said Vijay Dandapani, President & CEO of the Hotel Association of New York City. “Most importantly, it is an example of management and labor working together to enable a very positive outcome. The industry thanks the Mayor for taking this much needed step that will go a long way towards the hotel industry recovering more quickly as the pandemic wanes.”