TOT on the Rise

Posted on August 23, 2013 by Submitted

Dear Editor,
Fortunately the Great Recession is behind us, people are spending money and booking lodging in Sonoma as predicted by PKF Hospitality Research which has forecasted an increase in demand and occupancy rates for U.S. hotels.

In Sonoma, the effects of a fixed lodging supply are predictable: as demand continues to increase our existing lodging operators will experience higher occupancy and be more profitable. Accordingly, TOT revenue to the city, (TOT is the hotel tax visitors pay) will increase as well, and the Hotel Limitation Measure Impact Study, researched by Preserving Sonoma, author of the Hotel Limitation Measure, has predicted that TOT revenue will increase by a substantial amount.

The Impact Study forecasts Sonoma will receive just over $280,000 in additional TOT revenues for 2013 based upon the analysis of the first 5 months of 2013 – without any new hotels.

And using conservative assumptions, the Impact Study states that even with no additional hotel rooms, based on trends in the hotel industry and projected economic forecasts, Sonoma’s TOT revenues will increase from a projected $2.8 million in 2013 to over $4.3 million in 2017. The occupancy rate will increase over that same five years to 75.2%.

The Impact Study includes those yearly projections with appropriate citations. Note that the $17,500 consultant’s report commissioned by the city council does not provide links to its sources, and as such, it is difficult for their numbers to be independently verified.

The Preserving Sonoma Hotel Limitation Measure Impact Study may be read here:

Karla Noyes