Coronavirus taking its toll on hotel tax revenues across the region - TribLIVE

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As Western Pennsylvania struggles with the coronavirus, officials say the pandemic is expected to have a dramatic, continued impact on tax revenue collected from hotel stays, which in turn is used to promote the region’s more than $7 billion travel industry.

Virus fears resulted in fewer people coming to the region and a substantial reduction in promotions for the remainder of 2020 and into 2021.

“It’s devastating,” said Jerad Bachar, president and chief operating officer for VisitPittsburgh, which promotes tourism in Allegheny County.

According to figures from the Allegheny County treasurer’s office, more than $37 million was collected through its 7% hotel tax in 2019, but early returns indicate revenue will be significantly less this year amid the pandemic.

In April, hotel tax revenues were about $940,000, down nearly 30%, with similar reductions anticipated in May and June.

The county controller’s office late last year reported more than $14 million generated by the hotel tax was used to pay debt on the David Lawrence Convention Center and another $10.7 million was earmarked for use by VisitPittsburgh in 2018.

During a 15-week period from mid-March through the end of June, 1 million fewer hotel stays were lodged compared to a year ago and 2.6 million fewer people visited the region, Bachar said. Fewer hotel stays means less money available to spend on tourism promotion.

“It’s a vicious cycle,” Bachar said.

Hotel tax revenues in Westmoreland County, the second largest county in the region, also are behind. Treasurer Jared Squires said tax collections were on the rise through last year but were trending down in early 2020 even before the pandemic took hold.

Revenues cratered starting in March and, through May, declined by more than 70%. Just under $46,000 in hotel taxes was collected in May, compared with more than $142,000 a year ago, Squires said.

Westmoreland’s 5% hotel tax is allocated to the Laurel Highlands Visitors Bureau, which promotes tourism in Westmoreland, Somerset and Fayette counties.

Officials in the three-county region said they have started to see improvements over the last month.

“Are we going to have a summer like 2019? No. But I am encouraged by what we are seeing,” Laurel Highlands Visitors Bureau Executive Director Ann Nemanic said.

Decreases in hotel tax revenue will have an impact moving forward, according tourism officials.

In Allegheny County, VisitPittsburgh laid off or furloughed more than half of its staff and Bachar conceded the agency will have fewer resources that could impact future tourism, an industry responsible for more than 43,000 jobs in the region.

“We know funding for tourism is vital. We have to make sure we put money back into the travel industry,” Bachar said.

Hotel tax revenues in Westmoreland are used to promote both the region and local destinations. More than $1.4 million in tourism grants were handed out in the three-county region earlier this year, including $300,000 in Westmoreland County.

The grant program could be suspended in 2021 because of the pandemic, Nemanic said.

“We will ask county commissioners to pause the grants for 2021 so we have a sufficient amount to award in 2022,” Nemanic said.

Westmoreland commissioners in early March allocated $834,000 in hotel tax revenue for tourism-related projects and to embark on a messaging and advertising campaign.

Commissioners said about $1 million remains available for county-specific tourism programs but concede future projects may be delayed because of revenue shortfalls related to the pandemic.

“We know revenues will be down, but we’ll do what we can to help the projects that were started to get finished,” Commissioner Sean Kertes said.

Rich Cholodofsky is a Tribune-Review staff writer. You can contact Rich at 724-830-6293, rcholodofsky@triblive.com or via Twitter .

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