City hotel tax should be raised
This important enabling legislation allows Philadelphia City Council to implement a tax of up to 1.5 percent on hotel room rentals, with the revenue to be used to fund convention and tourism advertising and for support of the expanded Convention Center. The present hotel tax is 7 percent, and the addition would mean $2 more on the average nightly hotel bill.
As good corporate citizens, the Greater Philadelphia Hotel Association understood the need for the funds to come from a tax on their services.
The revenues of previous hotel taxes have supported the Pennsylvania Convention Center, the Philadelphia Convention & Visitors Bureau and the Greater Philadelphia Tourism Marketing Corporation.
This investment has paid big dividends for Philadelphia, producing jobs and revenues for nearly two decades. Philadelphia is now a premier destination for conventions and leisure tourists, and we now have before us a great opportunity to tell the world.
Equally important, everything our visitors enjoy here enriches the lives of our residents. There are no "visitors only" signs hanging over our museums and restaurants, and our streets are busier day, night and weekends, making them safer and more enjoyable for residents.
Job opportunities from entry level positions to management are provided by the hospitality industry, which currently employs 88,000 people.
The increase in pride that Philadelphians have in seeing their city's treasures in the news; seeing people here from around the country and around the world; seeing new shops and restaurants, spurred by Convention Center activity and the critical mass of tourists leads to more economic development and population growth.
In 1993, the Pennsylvania Convention Center opened and became a new and compelling economic engine of Philadelphia's hospitality industry The original investment led a trail of new developments, including the resurgence of the Reading Terminal Market, tens of billions in economic impact from visitors (50 percent from the life sciences and education sectors), and thousands of new jobs for Philadelphians.
Part of the original room tax paid for the debt service on the building, and also supported the Convention Center's Education and Training program, providing more than $15 million to train students, and the unemployed and underemployed for careers in Philadelphia's booming hospitality industry. Forty-one percent of all Center City hotel business is related to meetings and conventions.
Because a big city and people who work in the hospitality industry need leisure travelers too, in 1997, GPTMC began advertising the region's arts, culture, dining, history, neighborhoods, outdoors, countryside, etc.
At that time only 6.5 million overnight leisure visitors came to the Philadelphia region. Ten years later that figure is up 63 percent, with 10.6 million overnight leisure visitors to the region in 2007. Those leisure visitors contribute $17 million a day, or $6.3 billion annually, to our region's economy through their spending on hotels, restaurants, attractions and transportation.
Today, Pennsylvania Convention Center expansion, the largest investment in the state's history, will generate an additional $55 million in hotel revenue per year, 2,500 new hotel rooms, and 1,800 new jobs. It will also spark the redevelopment of North Broad Street and increase ancillary businesses such as food purveyors, hotel/restaurant suppliers, etc.
A portion of the generated tax funds will be used by the Philadelphia Convention & Visitors Bureau, which has already booked $1 billion in conventions into the expanded building, for robust marketing of the Pennsylvania Convention Center
Together, the PCVB and GPTMC have been telling Philadelphia's new stories and attracting people here to hold a meeting or convention, vacation or have a weekend getaway - and the results have truly been transformational.
This growth would not have been possible without the investment of our city and commonwealth. But we are not alone, and our competition is aggressive. Just this year New York's Mayor Bloomberg designated 15 million more marketing dollars per year for the next three years. We need to stay in the game.
The new legislation signed by Gov. Rendell is the next step toward investment in our region's future that can benefit everyone. Previous such investments have paid off, and our joint track record merits this additional tax. Ultimately, for this to happen, City Council and the mayor must approve use the enabling law to increase the hotel tax.
Marketing Philadelphia and expanding the Convention Center are two key components to the economic wellbeing of our region for visitors, residents and businesses, alike.
Two years of collaborative work on this initiative by the Pennsylvania Convention Center, Greater Philadelphia Tourism Marketing Corp., Philadelphia Convention & Visitors Bureau, and the Greater Philadelphia Hotel Association is aimed at driving business to Philadelphia, generating jobs, and increasing the quality of life in the city we all love.
Thomas "Buck" Riley is chairman of the board of the Pennsylvania Convention Center Authority. E-mail him at information@paconvention.com.


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