Simi Seeks to Raise Hotel Bed Tax to 10%
After offering overnight guests the lowest surcharge in the county for years, Simi Valley wants to increase its tax on hotel beds from 8% to 10%.
The City Council plans to hold a public hearing Monday night on its proposal to jack up the tax, which promises to net $75,000 to $100,000 more per year for city coffers from the four hotels in Simi Valley.
The rate should be raised now not to earn extra money for the general fund, but to lessen the shock if it has to be raised again in a few years, said Assistant City Manager Mike Sedell.
Most Ventura County cities already charge bed taxes of 10%--including Ventura, Ojai, Thousand Oaks and Oxnard--while Camarillo charges 9%, according to the staff report.
If the others go to 12% bed taxes, for instance, Simi Valley would some day have to raise its bed tax rate from 8% to 12%--an increase of 50%, Sedell said.
“The council doesn’t like to take long periods of time between reviews of revenue streams,” Sedell said. “This keeps us in line without creating too much of a dent to the individual.”
Bad idea, said Pat Fitch, manager of the Motel 6 in Simi Valley.
“I think it will hurt our business quite a bit, in that most people who come to Motel 6 are looking for a clean budget room, and they think our price is a little high as it is,” Fitch said Friday.
A room for a single adult there costs $35.99, plus a $2.88 bed tax under Simi Valley’s current 8% rate.
But the proposed 10% tax on that room charge would be about $3.60, bringing the total to nearly $40, Fitch pointed out. Some customers would likely go to the Motel 6 in Thousand Oaks instead, she said, where a room costs $29.99 plus a 10% bed tax of about $3.
Many of the Simi Valley Motel 6’s customers these days are construction workers staying in town to repair local earthquake damage, she said.
"(Construction) companies are always looking to save a dollar here and there,” she said. “Who knows, until it happens, what people will do?”
At the Simi Valley TraveLodge, $49-$55 rooms for single adults carry a bed tax of $3.92 to $4.40, but under the new proposal the tax could be raised to between $4.90 and $5.50.
George Peace, assistant general manager of the TraveLodge, predicted the tax increase might hurt business, as high bed taxes have in some major cities. In New York City, taxes were cut recently from nearly 20% to 13.25%, plus $2, while Los Angeles charges bed taxes of 14%.
Officials at the Clarion Hotel in Simi Valley declined to comment on the proposed tax hike.
However, George Thingili, general manager of the Radisson Hotel in Simi Valley, said he has never heard customers complaining about the bed tax.
A room for a single adult there costs $99, or $89 for corporate customers, plus the 8% hotel tax.
Thingili said of the increase, “If it goes to promote the city and tourism, I’m all for that.”
But Sedell, the assistant city manager, said the bed tax revenues go into the general fund, where they help subsidize police, information and emergency services for visitors.
The public hearing on the proposed bed tax increase is scheduled as part of the City Council’s regular meeting, which starts at 6:30 p.m. Monday at City Hall, 2929 Tapo Canyon Road.