NEW YORK CITY (WABC) -- Mayor Bill de Blasio signed an executive order Wednesday eliminating New York City's hotel room occupancy tax for the summer in an effort to help accelerate the recovery of the hotel industry, which has been particularly hit hard by the COVID-19 pandemic.
The 5.875% tax rate will be eliminated from June 1 through August 31, and the mayor hopes the 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," de Blasio said. "We're ready for them. 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, and 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.
The 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 is expected to complement the multi-faceted effort underway for a successful restoration of the leisure and hospitality sector that 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," Department of Finance Commissioner Sherif Soliman said. "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."
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