Survey: Proposed San Francisco Tax Hike Could Discourage Travel

A proposed tax on travelers to the San Francisco Bay area faces tough opposition from the travel industry. The results of a comprehensive new survey of travel and meeting industry professionals reveal the damage a proposed tax hike in San Mateo County, CA could have on the local economy, the U.S. Travel Association reports. 

Convention, trade show and meeting professionals participating in the survey say new taxes on rental cars, hotels and parking will make them think twice about holding future events in the San Francisco Bay Area, the association says.

All travelers renting vehicles from San Francisco International Airport (SFO), staying in SFO-area hotels, or parking at SFO hotels could be impacted.

“Our survey results clearly show that raising taxes on travel goods and services would drive travelers to other destinations,” said Roger Dow, president and CEO of U.S. Travel. “The San Mateo County Board of Supervisors’ proposed tax hike will hurt the local economy, deepen the county’s budget woes and will be felt throughout the Bay Area. We urge local voters to reject this ill-conceived plan.”

The San Mateo County Board of Supervisors proposed tax increase will appear on the June 5 ballot as measures T, U and X. The taxes would be charged to all travelers renting vehicles from San Francisco International Airport (SFO), staying in SFO-area hotels, or parking at SFO and local hotels. The Board’s proposal would hike rental car taxes by 11.3 percent, boost the hotel occupancy tax by 20 percent and establish a new 8 percent levy on parking, U.S.Travel says.

Should the San Mateo proposal become law, more than 40 percent of survey respondents said they would “definitely” search for a new meeting destination or “reconsider” holding their next meeting or event in the San Francisco Bay Area. Another 25 percent said they would slash their spending on meetings even if they decided to continue to hold events in the San Francisco Bay Area, U.S.Travel says.

The survey was conducted by U.S. Travel Association in partnership with Meeting Professionals International (MPI) and the San Francisco Travel Association. The survey included 366 respondents; fully half of whom plan meetings, trade shows, conferences or other business events in the Bay Area each year.

“I hope San Mateo County voters hear the message our global membership has shared,” said Bruce MacMillan, president and CEO of MPI. “Voters have lots of options and approving a sweeping, across-the-board travel tax hike will only encourage our members to plan conventions and meetings outside of the Bay Area.”

According to the survey, 58 percent believe the Bay Area’s tax rates are already among the highest in the country, second only to New York. San Mateo County’s proposal threatens to make this perception problem even worse, the association reports.

“A tax hike that punishes travelers is equivalent to putting up a giant ‘keep out’ sign. We should be doing all we can to welcome more travelers to the Bay Area and inviting more meetings, conferences and events to come here. Increasing travel and tourism generates tax dollars and creates jobs,” said President and CEO of the San Francisco Travel Association Joe D’Alessandro.

Visitors traveling through SFO airport support more than 300,000 local jobs, generate over $16 billion in spending and nearly $790 million in state and local taxes.

These results echo the findings of a 2011 U.S. Travel Association national survey which found that 49 percent of travelers would change their plans due to high taxes on travel goods and services.

The San Mateo County Board of Supervisors proposed a similar tax hike in 2008, but local voters soundly defeated the measure, proving that proposals to raise taxes on business and leisure travelers are unpopular, U.S. Travel says.