New York temporarily dropping hotel room occupancy tax

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New York skyline [Credit: Dibrova/Shutterstock.com]
New York's 5.875% hotel room occupancy tax will be temporarily eliminated for a three-month period, starting June 1. Photo Credit: Dibrova/Shutterstock.com

As part of New York's efforts to jump-start tourism, New York mayor Bill de Blasio has announced that the city's 5.875% hotel room occupancy tax rate will be temporarily eliminated for a three-month period, starting June 1.

According to a press release from New York's City Hall, the move is intended to allow hotels to potentially lower the cost of their rooms, which could in turn lead to increased demand and occupancy.

The city reports that revenue from the hotel room occupancy tax is currently down approximately 89% on fiscal 2020, with New York's leisure and hospitality sector losing an estimated 257,000 jobs last year. 

Vijay Dandapani, CEO of the Hotel Association of New York City, applauded the city's decision, calling it "an example of management and labor working together to enable a very positive outcome."

"The temporary occupancy tax waiver is a much-needed lifeline that is strongly welcomed by the beleaguered hotel industry," said Dandapani in a statement. "The industry thanks the mayor for taking this much-needed step that will go a long way toward the hotel industry recovering more quickly as the pandemic wanes."

The mayor's executive order comes as a flurry of high-profile New York hotels reopen their doors for the first time since early 2020. These include the Plaza Hotel, which began welcoming back guests on May 20, as well as the Mandarin Oriental New York and Park Hyatt New York, which both resumedoperations in April. The Ritz-Carlton Central Park is targeting a June 2 reopening.

Also in June, NYC & Company will launch a $30 million campaign, which the destination marketing group said will mark the city's largest-ever marketing effort. Initially set to focus on driving domestic tourism, the push will include television, digital and out-of-home components and content marketing, social media and influencer activations.

NYC & Company predicts that the city will host around 36.4 million visitors in 2021. In 2020, the city reported a total of 22.3 million visitors.

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