Colorado

Hotel ‘bed taxes’ are here to stay.

(This is a story we first wrote for NBC News)

Ever check out of a hotel and notice a “transient occupancy tax” on your bill?

Unfortunately for your wallet, the Biden administration’s crackdown on “junk fees” won’t do anything about it.

But unlike some of the add-ons hoteliers and booking sites charge, this common type of tax doesn’t pad corporate margins, and the projects it funds are evolving in step with the post-pandemic tourist economy.

These levies — often known generically as “bed taxes,” though they go by many names — are imposed by state, county and local governments or tourism improvement districts.

They can drive up the cost of an overnight stay at hotels, motels, bed and breakfasts, campgrounds, and short-term rentals like Airbnbs, sometimes by up to 20%.

The jurisdictions typically decide how to allocate the revenue these taxes pull in. Sometimes they supplement governments’ operating budgets; other times they’re used to finance tourism campaigns, build convention centers, support cultural programs, or hire beach lifeguards.

New Uses For Hotel Bed Taxes

But in Estes Park, Colorado, bed taxes are now subsidizing housing and childcare costs for local workers.

The mountain community, known as a base camp for adventures in Rocky Mountain National Park, voted for that move after a law Colorado enacted in March 2022 began allowing cities and counties to use hotel tax proceeds to cover housing and child care for the tourism-related workforce

In Estes Park, the decision came after advocates flagged a proliferation of second homes and short-term rentals that they said had strained affordability in the area.

Last November, the city raised its hotel bed tax to 5.5%, up from 2%, and earmarked funds from the increase — an estimated $5.3 million in 2023 — for the housing and child care initiatives, said Kara Franker, the CEO of Visit Estes Park, a local tourism group. That beefed-up bed tax now combines with town, county and state sales tax to add a cumulative 14.2% onto the cost of a nightly stay in the city, she said, helping to fund a range of public services alongside the new workforce-related initiatives.

According to Colorado tourism officials, at least 17 municipalities have imposed a new bed tax or modified an existing one over the past year, many of them putting the revenue toward new types of projects.

Similar moves are happening in tourism-heavy areas across the U.S., said John Lambeth, CEO of travel consultancy Civitas, reflecting a more expansive approach that is “more about stewardship of the destination and giving back to the community.”

Jack Johnson, chief advocacy officer for the travel industry group Destinations International, said the disruptions of the pandemic have motivated some communities to consider whether broader social and economic policies “can be tied to travel in tourism, either directly or indirectly, and therefore paid for out of the bed tax.”

Hotel taxes were first adopted in the U.S. by New York City in 1946, became commonplace nationally by the 1970s, and are what guests typically see itemized on their hotel bills today, said Elizabeth Strom, an associate professor at the University of South Florida’s school of public affairs. Public officials have long loved bed taxes because they generate easy-to-raise income from out-of-towners, not local voters.

“Every state either has such a tax at the state level or permits such a tax at the local level or both,” Strom said.

The newer breed of bed tax experiments, like those in Colorado, are being driven as much by windfalls from rebounding travel demand as by evolving civic attitudes.

Tourism revenues dipped sharply during the pandemic, but in 2023, hotel-generated state and local tax revenue — which includes bed taxes along with the other levies lodging operators contribute to government entities — is expected to reach $46.71 billion nationwide, up 13.6% from 2019, according to a study by the American Hotel and Lodging Association and Oxford Economics.

Bed taxes already account for nearly half of the hotel-generated taxes in the U.S., the AHLA said, and it expects bed taxes this year will likely exceed the $19 billion they generated in 2019.

In Florida, which has been hit by multiple hurricanes that affect beaches and islands, Broward, Collier, Lee and other counties are applying tourism revenues to rebuild and protect those travel assets, Johnson said. Bed taxes now contribute financing for dune restoration, shoreline stabilization, erosion control, and other coastal management activities, he said.

The shift has raised some concerns from the hospitality industry.

“In general, the more taxes states and cities levy on hotels, the more of a competitive disadvantage they create for local businesses, as potential hotel guests may seek out other destinations with lower tax burdens,” AHLA CEO Chip Rogers said.

As for the industry-imposed fees the Biden administration is scrutinizing, AHLA spokesperson Curt Cashour said that only 6% of hotels nationwide charge “a mandatory resort, destination or amenity fee, at an average of $26 per night,” adding that they “directly support hotel operations” like staff wages and benefits.

Cashour said the AHLA is continuing to work with authorities “to ensure that the same standards for fee display apply across the lodging booking ecosystem” so guests aren’t caught off guard.

Bed taxes may send extremely cost-conscious leisure and business travelers to lower-taxed destinations, Strom said, “but if you are a unique location, I don’t think an extra few dollars a night in taxes matters.”

“If people want to see the Space Needle,” she added, “they aren’t comparing the cost of rooms in Seattle to the cost of rooms in Portland.”

Some top tourist destinations say they aren’t worried about turning away tourists at the moment.

Hawaii, for example, is seeing a strong post-pandemic tourism recovery, even though its 13.3% state and county transient accommodation taxes combine with 4.5% excise taxes to add close to 18% to nightly hotel bills. State revenue forecasters expect Hawaii’s bed tax alone to bring in more than $785 million this year, up from $645 million last year.

Since drawing more tourists isn’t the main challenge, said Ilihia Gionson, a public affairs officer with the Hawaii Tourism Authority, the agency is using some of the funds it gets from hotel taxes to try to influence what types of visitors it attracts.

“The wheels were turning before the pandemic and accelerated during the pandemic,” he said. “We want visitors that align with our economic and community goals — who will shop at local businesses, eat in local restaurants, participate in ‘voluntourism’ and be mindful of their economic impact. So, it’s less about, ‘Come here,’ and more about, ‘Here’s who we are and what we’re about.’”

Keys for Trees

San Luis Obispo, along California’s Central Coast, is also earmarking some of its hotel tax income for projects that authorities hope will benefit the community.

Its existing transient occupancy tax supports the city’s general fund. But last year a new “Keys for Trees” program began setting aside some proceeds from the city’s tourism assessment tax — another government surcharge on hotel bills — to help plant 10,000 trees by 2035 as San Luis Obispo pursues its carbon neutral goals, said Tourism Manager Molly Cano.

The city’s business improvement district raised $1.6 million from this assessment pre-pandemic and $2.1 million in fiscal 2022, Cano said. Previously, all these funds were used to market San Luis Obispo to visitors. But now 1% of that revenue is steered toward the new program, with some $17,000 reserved for planting 35 trees this fiscal year.

“There’s no extra step to take,” Cano said, “and we think visitors will enjoy knowing that just by booking an overnight stay, they are helping to preserve the beauty of our community.”

Visit National Parks at Denver Int’l Airport

 

It’s a fair bet that you won’t have time to visit all four of Colorado’s national parks on your next trip to the Centennial State.

And it’s a fair bet that, like me, you can’t even name Colorado’s four national parks.

For the record they are: Mesa Verde National Park (Cortez and Mancos); Rocky Mountain National Park (East Park and Grand Lake); Grand Sand Dunes National Park and Preserve, in Mosca;  Black Canyon of the Gunnison National Park, in Montrose – not to mention the historic sites and spaces dubbed ‘monuments.’

 

So it’s good to know that Denver International Airport (DEN) has an exhibition celebrating the state’s four very diverse National Parks – which have dunes, deserts, canyons and mountains – at the Ansbacher Hall in the Jeppesen Terminal, Level 6 north before A Bridge Security.

The exhibit has images, objects and artifacts offering historical, education and recreational facts unique to each park and provides scenic murals where travelers can take photos “inside” all four of Colorado’s national parks. (Is that cheating?)

(Photos courtesy Denver International Airport)

Fines set for having pot at Colorado airports

den sign

While it is now legal to possess and purchase marijuana in Colorado, anyone who brings pot to either of the state’s two busiest airports – Denver International and Colorado Springs – now risks the chance of being fined.

On Wednesday, Denver International Airport held a public hearing to formalize a policy it rolled out earlier in the month prohibiting the possession, use and consumption of marijuana for everyone – travelers, meters and greeters and workers – on airport property.

At the same time, DIA officials announced a set of “administrative citations,” or fines that would be issued as part of that policy: $150 for a first offense, $500 for a second offense and up to $999 for a third offense and beyond.

“This is really a last resort for us though,” said DIA spokeswoman Stacey Stegman. “Our primary goal is for people to comply with federal law,” which states that it is illegal to bring marijuana past security or transport it across state lines. See DIA’s new signage below, and then read on.

Stegman said that, as at other airports, if a TSA officer discovers marijuana, local law enforcement is called. “Law enforcement would look at the circumstances and determine what to do—depending upon intent, age, quantity, etc.”

If someone over age 21 is found at DIA airport with a small amount of pot, they’d likely be asked to put it in their vehicle, have someone take it away from the airport or asked to throw it away in a checkpoint trash receptacle. (DIA’s receptacles have lids with small holes, so Stegman isn’t worried about discarded marijuana being retrieved by others.) Those who decline these options would be asked to leave the airport and, before a citation would be given “other options would be explored,” said Stegman.

Signs outlining the rules will be posted at Denver International Airport within seven days, at which time airport and local authorities will begin enforcing the policy.

Starting Friday, January 10, pot is also prohibited throughout Colorado Springs Airport. According to a report in The Gazette, officials have warned the public that possession of pot at the airport could be punishable by a fine of up to $2,500 – and jail time.

Those found with marijuana at the Colorado Springs Airport will have the option to give it up voluntarily, without penalty, by putting it in their cars, giving it to someone to take away from the airport or depositing it in an “amnesty box” to be destroyed.

(My story about pot fine at Colorado Airports first appeared on the Runway Girl Network)

Pot shopping tours now an option in Colorado

Colorado Highlife Tours -

(Courtesy Colorado Highlife Tours)

As Colorado becomes the first state in the nation to allow recreational marijuana sales beginning Jan. 1, a budding pool of “potrepreneurs” have high hopes for an influx of out-of-town pot tourists.

Colorado High Life Tours, which promises “fun, affordable and discreet” cannabis-centered excursions, is expanding its private and public limo and bus tours.

“You’ll be able to buy a little pot here and there, see a commercial grow, visit iconic Colorado landmarks and take lots of pictures,” said company owner Timothy Vee. “It will be like a Napa Valley wine tour.”

Cannabis-friendly guides, activities and tours in Colorado are already available. As of Dec. 30, 14 retail marijuana stores in Denver had received licenses to open on the first of the year and two dozen other marijuana-related businesses that had met the city’s licensing requirements were awaiting approval.

Beyond the Mile High City, more than 25 other towns and cities will allow medical marijuana businesses to start adding or transitioning to retail marijuana sales Jan. 1.

Unlike Napa Valley wine tours, however, out-of-state tourists to Colorado’s pot retail stores won’t be able to take home most products they purchase. “It remains illegal to take marijuana out of the state,” said Michael Elliott of the Medical Marijuana Industry Group.

And because marijuana also remains on the Transportation Security Administration’s list of prohibited items, Denver International Airport will enforce a new policy that bans pot throughout the airport.

“Previously, a visitor to the airport could have less than one ounce of pot as long as they were over 21 and did not pass through security,” said airport spokeswoman Stacey Stegman. Now, to ensure that passengers don’t mistakenly violate the rules of the airport and air travel, “we have prohibited the possession, use, and consumption of marijuana for everyone on airport property.”

Travelers also won’t find much information about pot tours alongside official city and state tourism brochures, vacation guides and websites promoting Colorado’s skiing, hiking and cultural activities.

“We have a fiduciary responsibility to get the best return on our marketing efforts,” said Rich Grant, spokesman for Visit Denver, the city’s travel and visitor bureau. “There is no research yet on the benefits of marijuana tourism, so for at least the first year we’re not going to market that in any way.”

Pamphlets created by a coalition of marijuana industry organizations seek to fill in the gaps, informing tourists of what they can and cannot do while in Colorado and offering such advice as “Do not eat the whole brownie” and “Remember, Uncle Sam says ‘Stay off federal lands with that devil’s lettuce.’ ”

“There may be a line out the door and we expect our budtenders will be dealing with people who have a myriad of questions. So we wanted to offer information about the laws and about safe consumption,” said Elan Nelson, a business strategy consultant for Medicine Man in Denver.

In south Denver, the staff at Evergreen Apothecary, located about an hour and a half from the Wyoming border, is ready for an influx of first-day retail pot shoppers with rented propane heaters, red velvet ropes and a security staff that will be on duty starting at 8 a.m.

“We’ll be giving out special T-shirts,” said shop co-owner Tim Cullen, “and my parents have volunteered to hand out coffee, juice and snacks to the people standing in line.”

Longtime travel expert Arthur Frommer has predicted that pot tourism will make Colorado a new hot spot. But despite the fact that this sort of tourism has been lucrative for shop owners in Amsterdam, his daughter, Pauline Frommer, the editorial director of Frommer Media, said she’s taking a “wait-and-see approach.”

Leafly, an online database with thousands of user reviews of medical marijuana strains and dispensaries around the country, expects that starting Jan.1 there will be a large number of reviews written about the retail pot stores and recreational marijuana strains available in Colorado.

“It will help tourists in new locations find the right strain for the experience they’re looking for. And once people find the right strains, we can tell them which retail stores have it and which retail stores are top-rated,” said Leafly CEO Brendan Kennedy.

Prior to Jan. 1, Colorado High Life Tours has mixed sightseeing with stops at glass-blowing shops, marijuana grow centers and has offered customers “free samples”—because buying pot was not yet legal.

“You live and learn,” said Vee. “On our tours, we’re getting a lot of empty nesters that haven’t smoked pot in 20 years. We’ve also had people who have never smoked pot take our tours and had one couple get high and so paranoid that we had to interrupt the tour and take them back to their hotel.”

(My story about pot tourism first appeared on NBC News Travel.)