House panel clears new hotel fee

New Orleans hotels would be able to add a new fee on their guests bills for tourism marketing under a bill that cleared a Louisiana House panel Wednesday.

The Local and Municipal Affairs Committee, without objection, advanced the Senate-passed legislation to the House floor for debate.

Opponents said New Orleans is financially strapped and there are greater needs like infrastructure improvements and public safety that are lacking funding.

“It’s a tax on tourists that will consume a portion of the tax capacity of the city,” said Janet Howard, president of the Bureau of Governmental Research. “Our issue isn’t with the Convention and Visitors Bureau having an assessment per say. It’s with allocating these limited resources without going through a prioritization that asks what are the most important needs of the community ... and how are we going to meet those obligations,” Howard said.

House Speaker Pro Tem Walt Leger III said the expanded marketing effort would yield big dividends — a projected $500 million economic boost and 5,000 new jobs. “We will generate the revenues and pay for the other things that are important,” said Leger, D-New Orleans, the bill’s cosponsor.

Senate Bill 242 would allow up to a 1.75 percent assessment on the daily room charge “for destination marketing, sales, public relations and for other matters deemed by the tourism organization to benefit directly or indirectly economic development, the traveler economy and tourism growth.”

The assessment is projected to raise $14 million annually. It would be levied in addition to hotel occupancy taxes totaling 13 percent.

Before the assessment could be implemented there would have to be a referendum called by the president of the Greater New Orleans Hotel and Lodging Association. Two-thirds of the votes cast would be required to approve or ratify any hotel assessment.

Those hotels that do not want to participate can resign from the tourism organization that would levy the assessment.

Mark Romig, president and chief executive officer of the New Orleans Tourism Marketing Commission, said the assessment would allow the city to market itself year-round as opposed to the six months it is doing today. He said New Orleans’ competitor cities market year-round.

Romig also told the committee that promoters of the assessment would enter into a cooperative endeavor agreement with the city to invest .25 percent of the funds generated into public safety, sanitation, infrastructure and other improvements in the Vieux Carre.

Carol Allen, president of the Vieux Carre Property Owners and Residents Association, asked the committee to defer action on the legislation. She said an amendment was needed to insert the now only promised 0.25 percent commitment in the legislation.

“What we believe is missing from this bill are that this money will be used as it is intended to be used,” Allen said.