New York will lose $1.3 billion in total state and local tax revenue from the hotel industry due to COVID-19, according to an Oxford Economics estimate released by the American Hotels and Lodging Association.
Nationwide, the total amounts to $16.8 billion of lost tax revenue for 2020.
A breakdown of the total lost revenue for New York includes:
– Occupancy Taxes: $968.6 million.
– Sales: $75.3 million.
– Gaming: $132.2 million.
– Personal income: $83.9 million.
– Corporate: $51.7 million
– Unemployment Insurance and other social: $6.2 million.
A McKinsey & Company study released in June indicated that hotels may not return to their pre-COVID -19 levels until 2023 or later, thus continuing the loss of tax revenues well into the future.
A coalition of hotel owners, operators and employers, Hotels Together, has been helping hotel owners work out loan arrangements with their lenders and urging Congress to pass additional economic assistance legislation for the hard-hit hospitality industry.
In particular, hotel owners are seeking more flexibility from their commercial mortgage-backed securities (CMBS) lenders as they work to cover payrolls, mortgage expenses and other operating costs during the recovery period.
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