New York Hotel Association Supports Hike in Bed Tax to Fund Javits Expansion

TSE STAFF
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New York – On March 23, the Board of Directors of the Hotel Association of New York City (HANYC) ratified the action of its Executive Committee for a special tax on hotel rooms.   The money raised would be used to underwrite a bond issue which, in turn, would be used for the expansion of the Jacob K. Javits Convention Center.

The board-approved program would impose a temporary $1.50 fee per night “per key.” This is an important distinction since the existing bed tax is levied “per room,” and those using a multi-room suite pay the existing tax for each room. (There would be no tax for duplicate keys.)

This funding proposal still has to be approved by the city and state, both of which have pledged $300 million each for a Javits expansion. It is not known how long this will take, but it may be as long as six months before the tax would go into effect. The current hotel tax is 13.625%.

Other provisos in the board approval are:

·        The money raised must be dedicated solely and completely to the expansion of Javits and none of the money can go into the general fund of the city or state;

·        Other travel and tourism-related businesses in the city, such as restaurants, must also contribute to the new tax in some manner; and

·        The tax ends at a date to be determined and mutually agreed upon.

HANYC realizes that the while the tourism industry is still suffering from the downturn that occurred following September 11, 2001, and that additional taxes can have a negative impact, it strongly supports the need for the expansion of Javits, since it would result in additional business for the city’s hotel industry in the years ahead.

The proposed expansion to Javits consists of two phases. Phase I calls for an 80% increase in exhibit space from the existing 745,860 square feet to 1,341,047 square feet. Dedicated meeting space is planned to increase more than tenfold,  from 22,800 square feet  to 297,718 square feet.  Phase II would add another 240,000 square feet of exhibit space and  30,000 square feet of meeting space. Finally, roughly 200,000 square feet of additional exhibit space is expected in the 75,000-seat stadium for the New York Jets which  will  be built south of the Javits Center.  The expansion is projected to increase the number of hotel room nights per year by more than 400,000.

Reach Joseph E. Spinnato, President, Hotel Association of New York City, at (212) 754-6700; jspinnato@hanyc.com