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June 18, 2020

Report: CT to lose $287M in hotel tax revenue this year

HBJ File Photo Homewood Suites in downtown Hartford has closed permanently due to economic uncertainty caused by the COVID-19 crisis.

A major decline in travel demand amid the COVID-19 pandemic is expected to cost state and local governments in Connecticut more than $287 million in tax revenue generated by the hotel industry in 2020, a new report shows.

The report by Oxford Economics, released Thursday by the American Hotel & Lodging Association (AHLA), says Connecticut's hospitality industry will be the second hardest hit state in New England based on hotel occupancy, sales and gaming taxes lost because of the coronavirus outbreak, which has forced in-state venues to operate at 50% capacity.

Elsewhere in the region, Massachusetts is projected to lose more than $306 million in tax revenue from hotel operations, followed by Connecticut, Maine ($65.9 million), Vermont ($60.4 million) New Hampshire ($46.5 million) and Rhode Island ($35.2 million).

States expected to lose the largest amount of direct tax revenue from the industry include California ($1.9 billion), New York ($1.3 billion), Florida ($1.3 billion), Nevada ($1.1 billion) and Texas ($940 million)

Nationally, the report anticipates hotel tax revenue in all states will drop by $16.8 billion in 2020.

The data surfaces as AHLA is urging Congress to provide additional relief for hotel operators that supported 8.3 million American jobs, contributed about $660 billion to the U.S. GDP, and generate $186 billion in local, state and federal taxes annually prior to the pandemic.

“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” AHLA CEO and President Chip Rogers said in a statement. “However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery. We expect it will be years before demand returns to peak 2019 levels.”

AHLA has laid out its so-called "Roadmap to Recovery" plan to federal lawmakers they say would help hotels retain and rehire employees, protect employees and guests and incentivize Americans to travel again.

The economic damage to the hotel industry has especially been felt in Hartford, where the Homewood Suites by Hilton, a 116-room hotel on Asylum Street, has closed its doors for good due to uncertainty surrounding mass COVID-19-related closings and cancellations.

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