Tourism on the rebound

Busy summer could help erase a double-digit bed tax decline

by Tom Coombe
Despite an anemic spring local officials expect that when all is said and done, lodging tax receipts will rebound from current levels.
A recent influx of summer tourism traffic, and reports that some area resorts are expecting steady business through September, is helping to drive that optimism.
That’s despite a report presented at Tuesday’s city council meeting showed that collections from the area’s three percent “bed tax” are down by about 15 percent.
April and May totals also figure to be significantly down, due largely to coronavirus-related stay at home orders that shuttered some local lodging establishments.
Nevertheless, Ely Mayor Chuck Novak voiced some optimism and backed it up with both data and anecdotal evidence.
“My comment is that this is not as bad as I thought it would be,” said Novak.
The mayor pointed to inconsistencies in the reporting of lodging tax proceeds, with some establishments paying on a monthly basis while others submit payments every quarter or even annually.
“We really don’t know the numbers until January,” said Novak.
Perhaps more importantly, “no vacancy” signs have been seen on a somewhat regular basis in town while many resort owners are also reporting brisk business.
“The Chamber’s information is we’re pretty well booked up for the season,” said Novak. “I think we’ll come up in some fashion.”
Area resorts have seen an influx of guests who normally vacation at Canadian resorts. The U.S./Canada border remains closed.
Receipts in January and February largely held even, but tax collections in March - when the corovnavirus pandemic began in earnest - tumbled nearly in half.
Compared to $5,720 in lodging tax collections last year, only $3,432 was collected this year.
April is typically one of the slowest months of the year while May, with the fishing opener and Memorial Day weekend, help kickstart the summer.
May lodging tax numbers have not yet been compiled, but anecdotally business appeared to pick up with more traffic over Memorial Day weekend.
Both tourism industry leaders and area elected officials often use the lodging tax receipts as a barometer in weighing the impact of tourism.
Lodging tax proceeds have climbed steadily form 2010 to 2018, jumping from $247,239 a decade ago to just over $306,000 in 2018.
Last year, proceeds declined by about five percent, coming in at $291,384.
The bulk of those numbers generally come from June to September, with last year’s totals as follows:
• June, $54,267;
• July, $67,288;
• August, $66,556;
• September, $38,028.
In contrast, no month from November through April topped $8,374 in 2019, with last November the lowest at $3,379.
Inflation and changes in room rates are not factored into the numbers, which have jumped from about $197,000 in 2000.
Funds from the lodging tax are utilized by the Ely Area Tourism Bureau to market and advertise the region.