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Full Rooms, Higher Rates Boost Lodging Taxes To Record Levels

By Christina Haley O'Neal, posted Aug 17, 2021
Tax collections from the area’s hospitality industry have hit records in recent months because of increased rates and more visitors to the area, area officials said Tuesday.

Recently released figures for June show nearly $2.9 million in room occupancy tax (ROT) collections from overnight stays, a 39% increase from the $2.1 million in collections received in New Hanover County last June.

“Typically, the ROT collections that exceed $2 million in a single month occur during peak summer months, most especially in July. Last year (2020) was the first year that each of the summer months -- June, July, and August -- exceeded $2 million in ROT collections,” said Kim Hufham, president and CEO of the New Hanover County Tourism Development Authority, doing business as the Wilmington and Beaches Convention and Visitors Bureau.

Figures in May also exceeded the $2 million mark.

That was a monthly high for May with $2.2 million, a nearly 136% increase from the $951,314 in collections last May.

May is historically the fifth-strongest month for ROT collections behind the summer months. September is also a strong month for area ROT collections, she said.

“We believe that the ROT collection increases are a combination of room rate increases and more visitors. There is a lot of pent-up travel demand coming out of a long lockdown, and many businesses have shared that they started experiencing summer numbers during the spring,” Hufham said.

The Wilmington and Beaches CVB is also anticipating the rest of this summer’s figures to prove strong. Typically, collection figure reports are about two months behind release month.

Moving into the fall, Hufham says the CVB is “cautiously optimistic” that more ROT increases could come due to continued pent-up travel demand. That’s if the COVID-19 delta variant doesn’t impact future travel plans, area ticket sales and requires other mandates to come in the future.

New Hanover County on Tuesday issued a mandatory indoor mask requirement starting this week.

“It is unclear at this point how the current rise in coronavirus cases will impact fall and beyond. Much will depend on government guidance/restrictions as well as how travelers perceive the safety of travel,” Hufham said.

Continued demand, however, for the rest of the fall is also coming in the form of visitors traveling from outside the area “to attend high-profile Live Nation acts that are scheduled to perform at the new Live Oak Bank Pavilion,” Hufham said.

Live Nation is also enforcing mandates for its concerts by requiring proof of vaccination or negative COVID tests in the fall.

“Fortunately, Wilmington and our island beaches has thus far been perceived as a safe destination because of our beaches, riverfront, state parks, outdoor recreation and the Count On Me NC and other safety measures that many businesses have implemented during the pandemic," Hufham said. "With so many unknowns we believe it’s too soon to make projections beyond summer."
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