Beginning January 1st, 2009, San Francisco Hotels will be assessing a special tax on all hotel rooms to support major improvements and renovations as well as ongoing marketing campaigns for the Moscone Center, the city’s downtown convention center. With all of San Francisco’s many sightseeing attractions, tourism is the city’s largest industry, with visitors contributing $8 billion to the local economy last year. With the convention center helping to drive a lot of that revenue, the San Francisco Board of Supervisors believed that the thirty year old facility was in need of an update, and decided to designate it a tourism development district in order to levy the tax. This is a similar approach to those neighborhood programs currently in places such as Union Square where the surrounding businesses support a special tax with funds supporting common goals such as cleanliness, safety, and beautification projects.
Hotels nearest to the Moscone center – located south of Market Street, a few blocks from the landmarks of Union Square and the San Francisco Museum of Modern Art, will be assessed a 1.5% hotel room tax, resulting in a $3 charge for a $200 room per night. Hotels outside of that immediate zone will be assessed a 1% tax, resulting in a nightly charge of $2 per hotel room for a $200 room. The San Francisco Board of Supervisors also approved the sale of bonds which could raise $40 million on top of the hotel tax levy, which itself is estimated to result in approximately $25 million per year over the next five years. Two-thirds of the funds realized from the tax will support the efforts of the conventions bureau and one third of the tax funds will go directly toward structural improvements of the facilities. All of the funds to come from the bond issue will go directly into Moscone Center facilities improvements. Without these funds, the center would not have the means to address some the facility’s current maintenance requirements, nor would it have the means to modernize the facilities and then effectively market those facilities in order to not only retain the current level of convention business, but attempt to attract new business in an increasingly competitive field given the contracting economic environment.
