Tourist-funded tourism: 57 counties can now raise their hotel tax

The additional funding will go towards tourism initiatives. 

A few weekends each year, hotels in Centre County are at full capacity. During Penn State home football games, Artsfest or move-in, good luck getting a hotel room. Last weekend’s graduation was no exception. 

“We booked the Nittany Lion Inn the day [registration] opened, the first day we could,” said Jim Sauter, whose son was graduating. “It’s about $400 a night, usually about $159, $179 a night.” 

After four years of tuition bills, the Sauter’s weren’t looking too closely at the hotel bill for this last hurrah. They said they wouldn’t notice a small tax increase. But for Centre County, that tax could help turn these big Penn State weekends into lucrative tourism initiatives for the whole region. 

Centre County is one of 57 counties in Pennsylvania that can now raise their hotel tax to five percent. The state capped the tax at three percent for those counties before. The extra income will go to the tourism bureau. Centre County Commissioner Mike Pipe says the increase capitalizes on tourism already happening. 

“The whole premise behind the original hotel room tax law was so that there’s a fee that was generated that then would be used to get more, as they call them, heads on beds,” said Pipe. 

The legislation just passed at the end of April, so the county hasn’t yet voted to raise the tax. But if they do, the increase could generate as much as $1.5 million a year for Centre County. Guests would see their hotel bill increase by a few dollars a night. 

Ten counties already have a higher hotel tax, either because they are first or second class counties, or because they got individual legislation passed. In Philadelphia, guests pay 8.5 percent to the county. In Erie, 7 percent. But the other 57 were stuck with a cap of 3 percent. 

Since 2008, Anne Druck, president of the York County Convention and Visitors Bureau, has been campaigning for the permission to raise the hotel tax in the county. 

“Lancaster [County] had it at the time, Dauphin County had it at the time,” said Druck. “Gettysburg, Adams County, they have since gotten their hotel tax increased. Our neighboring communities actually had the ability to invest more in their [tourism] industry so we were at a competitive disadvantage.” 

There was a struggle to get legislative attention over the years. But then Druck and York leaders began to put together a coalition of counties that felt similarly disadvantaged. 

“We may have gotten it through four years ago to help York, but having it take this long and having to work that hard on something that in the end benefited 57 counties is huge.”

Counties don’t have to raise their hotel tax, but now they all can. York County was the first to do so, with the county commissioners voting unanimously on Wednesday, to the sound of applause. They plan to put the money towards marketing York as the ‘factory tour capital of the world.’ 

If you didn’t know that York held that title, Druck hopes you will soon. She thinks raising the tax makes financial sense for all the counties. 

“When I looked at the state legislation and analysis that was done, it said that if all these counties that now have the ability to raise their tax from 3 to 5 percent in fact did that, it would generate another $28 million,” said Druck. That’s $28 million per year.

That’s money the counties could really use. The state’s tourism budget has been slashed over the years from a high of $41 million down to $2 million a year. If counties want to fund tourism, it’s going to have to come from their pocket. 

Raising the hotel tax is one way to do that, and tourism officials are banking on the fact that most people won’t notice the additional 2 percent charge on their hotel bill.