Maine may lose $66M in tax revenue because of COVID-19's impact on hotels
Maine stands to lose $65.9 million from state and local tax coffers this year due to the impact of the COVID-19 crisis on hotel operations, according to a new study.
An analysis by the American Hotel & Lodging Association and Oxford Economics shows the sharp drop in travel caused by the pandemic will drastically reduce tax revenues. They include levies on lodging, sales, gaming, personal income and corporate income, as well as taxes paid for unemployment insurance and other government programs.
That means Maine could be short $40 million in lodging taxes that would typically have been incurred, and will also lose out on an estimated $16.8 million from legalized gambling proceeds.
The figures do not include the property taxes generated by hotels, estimated to total about $9 billion nationally each year.
In 2018, the hotel industry directly generated nearly $40 billion in state and local tax revenue across the country. But the pandemic and resulting public health restrictions have led many lodging establishments to close at least temporarily, and forced many guests to cancel bookings.
The downturn has spurred a group of Maine’s tourism and hospitality businesses to propose an emergency plan for the industry, to be paid for with $800 million from the state’s federal funding from the CARES Act.
The AHLA said in a news release that 2020 is expected to be the worst year on record for hotel occupancy.
”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,” said the trade group's president and CEO, Chip Rogers.
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