Bureau wants more tax money

June Casagrande

The Newport Beach Conference and Visitors Bureau is hoping that the

city will agree to increase its cut of the local hotel tax.

Bureau head Marta Hayden says the added cash is needed to invest

in attracting future conference business to the city. But local

leaders disagree about whether the city is in a position to help out.

“We really see it as an investment in the future,” said Hayden,

who will give a presentation to the City Council next month on the

bureau’s request.

The Transient Occupancy Tax is the 10% surcharge on hotel rooms.

The bureau receives about 17% of those receipts, which comes to about

$1.3 million a year. Because times have been tougher than ever for

the tourism business in Newport Beach, bureau officials say they need

about $400,000 more to attract business that will bring in tax

revenues for years to come.

“We’re working with a contract from 1993,” Hayden said. “Who would

have seen 9/11 coming? Who would have seen this economy and all this

competition in Huntington Beach and Laguna?”

In the last year, more than 700 new guest rooms have been added

within an eight-mile radius of Newport Beach, many of them in

Huntington Beach, Hayden said. A little farther away, about 2,000

hotel rooms have been added in recent years in places such as Anaheim

and Garden Grove, creating a buyers’ market for convention planners

looking to get the sweetest possible deal from hotel packages.

City Manager Homer Bludau said that, as much as the city would

like to help out, he’s pessimistic that the general fund can spare

the extra $400,000. Instead, city officials have begun batting around

other suggestions.

Topping their list is the idea of encouraging hotels to add a 0.5%

surcharge on guest bills that Bludau said could bring in the needed

$400,000 without jacking up the cost of hotel rooms high enough to

cause prospective visitors to look elsewhere. The other option,

increasing the transient occupancy tax by half of one percent, would

require voter approval.

“Even for a tax that wouldn’t directly affect the people voting on

it, I don’t think this is a climate in which people are likely to

approve a tax increase,” Bludau said.

City Councilman Steve Bromberg said he supports the idea of

helping out the bureau any way possible, at least in the short term.

“We do need to spend money to make money, and [transient occupancy

tax] is a significant part of our budget,” Bromberg said. “We should

help these folks.”

* JUNE CASAGRANDE covers Newport Beach and John Wayne Airport. She

may be reached at (949) 574-4232 or by e-mail at

[email protected].