In New York’s latest move to revive its battered hotel industry, the city will cut the 5.875% hotel room occupancy tax during the busy summer travel season from June 1 to Aug. 31.
The decision comes as the city’s revenue from the tax is down about 89% from the fiscal year 2020 level after COVID-19 led to a “dramatic decrease” in tourism and business bookings, Mayor Bill de Blasio’s office said Wednesday in a statement. De Blasio signed an executive order to eliminate the tax.
“The temporary occupancy tax waiver is a much-needed lifeline that is strongly welcomed by the beleaguered hotel industry,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City, a pro-business trade group.
As the city reopens, New York recently announced a $30 million marketing campaign along with the offer of vaccines among means to bring tourists back.
The city’s tourism arm, NYC & Company, predicted 36 million visitors to the largest U.S. commercial real estate market in 2021. That was up from 22.3 million last year. The agency said the level will eventually recover and increase to 69.3 million in 2024, topping the prior record of 66.6 million in 2019.
While far short of its pre-pandemic level, the city’s key attraction, Times Square, has also seen a rebound in tourist visits.
The hotel industry lost about 257,000 jobs from March 2020 through December, the statement said, adding the tax waiver also could help lower the cost of rooms to attract more occupants.