Visitors to Burbank may have to pay a little more to stay overnight as the city implements a new assessment on larger hotels to help pay for a tourism district.
The assessment is expected to generate $2.6 million over five years to market and promote local hotels to attract more visitors, who will theoretically patronize local businesses and boost sales tax revenues, officials said.
As part of the tourism district, local hotels will be assessed 1% of their monthly revenues — a cost that is usually passed along to guests, said Mary Hamzoian, economic development manager for Burbank.
“This is not a tax. It’s an assessment,” Hamzoian stressed.
The City Council approved the district in a 4-1 vote last week. Councilman David Gordon dissented, saying he was concerned that raising prices in a sluggish economy is a bad idea.
The tourism district’s estimated annual budget will be $520,000, from which $416,000 will be allocated to sales and marketing. Another $78,000 will go toward administrative costs and $26,000 will be placed in a contingency fund.
Burbank officials said they weren’t concerned with the impact of higher hotel rates on consumers since tourism assessments are already prevalent in California, where 60 cities have similar districts and 13 more are in the process of forming them.
Hotel assessments generate $11.5 million in Los Angeles, $9.5 million in Anaheim and $7.6 million in Palm Springs and its surrounding cities, according to a city report.
Throughout the state, assessments range from 1% to 2%, though some cities, such as Lodi, Long Beach and Morro Bay, assess 3%.
Burbank officials have met with local hotel representatives four times during the past 13 months and have held many one-on-one meetings with hoteliers during that time, Hamzoian said. During the meetings, city officials have been gauging interest in a district and gathering input about key issues, such as exemptions.
Under the new system, group room contracts signed before Sept. 1 and guests who stay longer than 31 days will be exempt from the assessment, Hamzoian said.
In Burbank, there are 15 hotels with 25 rooms or more. Representatives from nine of those hotels have signed petitions supporting the district and Hamzoian said she expects two more — Extended Stay of America and Portofino Olive Manor — to come on board before the Aug. 30 deadline.
Four hotels — Best Western Media Center, Burbank Inn Suites, Burbank Travel Lodge and Quality Inn — have not responded to the city’s requests for meetings, Hamzoian said.
Three local hotels were not included in the district because they are too small.
Robert Tsay, general manager of the Ramada Burbank, said he thinks the additional marketing “will help drive up demand for hotel rooms in the city.”
The 1% assessment will be added to each guest’s final bill, he said.
General managers at the Marriott and Hilton hotels in Burbank could not be reached for comment.