Cleveland Hotel Rooms Could Get Pricier With Higher Bed Tax

Cuyahoga County will consider an increase to a local tax, but don’t worry, it’s not for locals.

A one percent hotel bed tax increase is on the county council agenda for Tuesday. County officials estimate it will generate an additional $4.6 million per year, which will go to operations and maintenance of the Huntington Convention Center. If the proposal passes, the bed tax increase would go into effect Jan. 1, 2020.

That boost would allow for some sales tax dollars that would have gone to the convention center to be redirected to support the Rock and Roll Hall of Fame and its induction ceremonies in Cleveland every other year, as well as bolster a professional sports facility fund for capital improvements at Progressive Field and Rocket Mortgage FieldHouse.

"This increase in the bed tax will support vital local assets — the Convention Center, the Rock Hall and our sports facilities — as well as fuel our continued momentum as a tourist destination," said Cuyahoga County Executive Armond Budish in a Monday press release. "That is the purpose of a hotel room tax for visitors to our community — better experience for visitors, which leads to greater success for our hospitality industry." 

The Rock Hall will get about $1.6 million and $3 million will go to the sports facility fund, based on the county's current estimates.

Cuyahoga County has had a lodging tax since 1992. Revenue from the 5.5 percent tax on hotels, motels, bed and breakfasts, Airbnb rentals and anywhere else visitors may stay for 29 days or less are disbursed annually to local municipalities and Destination Cleveland, the convention and visitor bureau for the greater Cleveland area.

Most of the repairs and upgrades at Cleveland’s sports venues are paid for with revenue from the 20-year sin tax voters renewed in 2014. But those funds are stretched thin: the county council earlier this month signed off on a plan to borrow $40.5 million for repairs at the Cavaliers’ Rocket Mortgage Fieldhouse. The new bond sale will reimburse the Cavs for work already completed or still underway at the fieldhouse. Council also approved refinancing for $40 million in bonds already sold for an earlier round of work at the fieldhouse and 25-year-old Progressive Field.

After introduction, the bed tax increase ordinance is expected to be referred to the Committee of the Whole for hearing and discussion.