The Heartbreak of Hotel Taxes

You go to check out of your hotel and get the bill. There at the bottom are the various taxes added on by state and local governments, always eager to tap the traveler and not the locals. These taxes can mount up, especially if you stay for several days. In an interesting piece in the Chattanooga Times Free Press, Brian Lazenby walks through the lodging tax in Tennessee’s largest cities.

Chattanooga comes in at just over 17 percent, Lazenby writes, “higher than that in Memphis, equal to Knoxville’s and slightly lower than Nashville, according to the Tennessee Hotel and Lodging Association.”

I called up Walt Baker, CEO of the Tennessee Hotel and Lodging Association, who gave the industry’s perspective on lodging taxes. The idea behind lodging taxes, he explained, is to raise money from visitors to invest in tourism related infrastructure and activities: convention centers, parks, tourism associations, et cetera. “Levying any tax is a risky proposition,” he says. “Investing these dollars in product and marketing that creates demand for the city/county that offsets any risk in increasing the cost of staying in a hotel room. If the destination is worth it–after the investments are made–then visitors will pay the room rates and the taxes to visit. If not, then tax rates become a barrier to visitors and the only way hotels can combat this is by compromising rates, which lowers all tax collections.”

What bugs Baker and the hotel industry is when communities such as Collierville (just outside of Memphis), which has the highest lodging tax in the state at 19.75 percent, spends that money instead on sidewalks, flower beds, and street signs that aren’t directly tourism-related. He mentioned other high-taxing Tennessee towns of Mt. Juliet and Lenoir City.

It’s never a bad idea to ask about these taxes, which aren’t always mentioned when you call a hotel and reserve a room. As the article points out in the case of Collierville, “Savvy travelers will opt instead to stay a few miles away in Memphis, which offers visitors more and only charges about 16 percent lodging tax.”

This blog is part of a much larger website, also entitled Tennessee Guy, that contains travel and cultural information about Tennessee. Visit it here.

2 Responses to The Heartbreak of Hotel Taxes

  1. Byron says:

    I just checked my hotel bill from the Marriott from a recent stay in Los Angeles and I paid $133.50 in taxes for the 5 nights I was there. It was $26.60 in room tax per night and .10 a night for tourism.

  2. Stay in Pigeon Forge motel rentals which offer luxury rental hotels at an affordable price in Smoky Mountain Lodging Association

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