Baltimore tourism agency reports drop in hotel tax revenue
The Kimpton Hotel Monaco in Baltimore at 2 North Charles St. in downtown.
Baltimore’s hotel tax revenue has fallen more than 61% in the wake of the coronavirus pandemic as a turbulent economy presents another hurdle for the industry, according to the city’s tourism agency’s annual report. Visit Baltimore.
In the report released Thursday, the quasi-public agency found that hotel tax revenue fell to $10.2 million in the last fiscal year. The organization expected hotel taxes to top the $33 million level starting in fiscal year 2019.
Additionally, Visit Baltimore’s fiscal year 2023 budget projects lower occupancy tax revenue. The organization expects to receive more than $8.69 million from this tax. This total is down from approximately $9.42 million raised at the end of fiscal year 2022 and $14.6 million in fiscal year 2019.
“The reality is that we are still in a post-pandemic recovery phase and continue to face challenges such as social injustice, war in Ukraine, increased gun violence, high oil prices gasoline, labor shortages and rising inflation,” the Visit Baltimore president said. and CEO Al Hutchinson, along with Chairman of the Board Charles G. “Chuck” Tildon III, wrote in the report.
Baltimore’s tourism industry has suffered a series of setbacks in recent years. Tourism declined after the 2015 riots and only approached pre-riot levels when the pandemic hit.
Nonetheless, there are signs that Baltimore’s tourism and hospitality industry is rebounding from the impact of the pandemic.
Visit Baltimore’s annual report found that reservations booked through its accommodation services and call center jumped to nearly 47,000 in fiscal year 2022 after falling to 18,300 the previous year.
Meanwhile, about 24.3 million domestic travelers visited Baltimore in 2021, a 13.3% increase from the previous year.
However, any rebound could be short-lived as nationwide tourism is expected to slow due to a turbulent economy.
Revenue per available room at city hotels nationwide remained well above 2021 levels, according to a CBRE industry report released in September. But hotel revenues have not returned to pre-pandemic levels. Overall gross operating profit for all hotels remained around 2% lower through July compared to the same period in 2019.
Soaring oil prices could hurt hotel profitability. The cost of utilities per room, according to CBRE, is on track to reach $2,813 by the end of 2022. The cost of utilities per room reached more than $1,800 last year and reached a recent low of around $1,500 in 2020.