June 28–A new fee that will be tacked onto the cost of renting a hotel room in Georgia — every room, every night — has hoteliers and visitors bureaus concerned.
Georgia lawmakers added the $5 hotel-motel fee late in the session to a transportation funding measure known as House Bill 170. Gov. Nathan Deal signed it in May, and it becomes effective Wednesday.
“There was an assumption made that 80 percent of the folks staying in a hotel room in Georgia are out-of-state visitors,” said Monica Smith, president and CEO of the Macon-Bibb County Convention & Visitors Bureau. “That is actually true for Atlanta, but it’s not true for the rest of the state. … Obviously, this was a huge shock to our industry that this fee was added essentially at the last minute to fund transportation.”
Of the convention groups that came to Macon during the past 12 months, 81 percent were Georgia-based groups, Smith said.
“So it’s going to have a significant impact on the groups coming to Macon,” she said.
And that means the fee won’t be bringing much new money from out of state when conventions are held here.
Since the average daily rate of a hotel stay in Macon is about $62, the $5 fee represents an 8 percent increase in the cost of a hotel stay.
“One of the reasons people like to come to Macon is not only is it accessible, but it is affordable,” she said. “So if you already plan to have a meeting here, now you’ve got about an 8 percent increase in the cost of your room that you did not anticipate. We are concerned about that and the potential to remain competitive, especially if the groups are looking at other locations or considering other states as well.
“It’s a higher percentage in a community like ours with a lower rental rate.”
At the end of May, there were slightly more than 5,000 hotel rooms in Bibb County, and about 36,700 rooms were sold during the past 12 months, she said. So the $5 fee would have generated around $183,000 if it had been collected last year.
The law says that any facility, including hotels, motel or inns with five or more rooms that provide sleeping accommodations to paying customers typically occupied by travelers, must collect the $5 fee from each guest for each night of their stay and send it to the state. It does not apply to dorms, camps or nursing homes.
Hotels must charge the $5 fee for the first 30 days of an uninterrupted stay by a guest. The fee is not collected after the first 30 days as long as the guest does not leave.
Smith said many hoteliers and convention planners were not aware of the new fee and her agency has been contacting folks to make them aware of it.
“I still believe there are probably still several hoteliers and businesses that book groups that don’t realize that this fee has gone into effect,” she said.
Cathy Garofalo, general manager with Homewood Suites Macon North, said it will be challenging informing people about the fee and the reason for it.
“That will be challenging especially for guests who have stayed here for a long time before,” Garofalo said.
She said she’s still reading up on the law to make sure the hotel collects it properly. For example, federal employees are exempt from the fee but state and local employees are not.
“So there has been a lot of questions, a lot of reading, a lot of learning,” she said. “We’re lucky to have the CVB because that’s where we got our first bit of information from.”
Garofalo said she was surprised that the fee applies to extended-stay guests during the first 30 days of their stay.
“It will make a difference with companies that are moving employees to the area who are looking for homes and stay with us,” she said. “That adds to their budget.”
Dinesh Patel, owner and general manager of LaQuinta Inn & Suites on Chambers Road in Macon, said he’s also concerned.
“My thought is it’s going to hurt business,” Patel said.
He said that people already fuss about the amount of taxes charged “and now this will add five more dollars. They will stop in Tennessee or in Florida. They will make a plan to not stop in Georgia.”
The extra fee might not affect people who stay in the higher-rent hotel rooms, “but it will obviously hurt the people who can only afford the budget hotels. … (Legislators) don’t know what the impact will be, but it’s going to be a big, big impact on us.”
Patel said that he’s disappointed legislators didn’t consult with hotel owners or others who will be affected by the fee.
He said it would have been perhaps better to put a $1 toll on the interstates near the state line to go toward the state’s transportation budget.
“That’s truly money for the roads,” collected from people who use the roads, he said.
Smith said she planned to attend a meeting at the Department of Revenue in Atlanta last week for a comment session about the new fee and where she expected to get any final updates to the regulation.
“Obviously, everybody in the state understands the importance of funding transportation,” she said. “We just wish that we had had an opportunity to discuss alternatives to a flat $5 fee being added to the hotels.”
To contact writer Linda S. Morris, call 744-4223.
