(The Center Square) – Seattle City Councilmember Sara Nelson is proposing a council bill that would establish a new 15-year business improvement area that would change a $4 per room a night fee to a percentage fee.
The proposed Council Bill 120641 would disestablish the current business improvement area called the Seattle Tourism Improvement Area, and replace it with a new one.
The city amended the original assessment rate of a $2 fee per occupied room night to $4 in 2022. The proposed ordinance would allow for a switch from the current $4 to an assessment of 2.3% of the total per night rate for a particular lodging room per night.
According to Council Bill 120641, changing the assessment rate from a flat fee to a percentage of the guest room rate would result in higher projected revenue overall for the area and a more equitable distribution of assessments.
Funds generated through the Seattle Tourism Improvement Area fee are used solely for domestic and international tourism promotion, advertising, sales and marketing activities. The city expects the new legislation to encourage tourism to Seattle, attract travelers for the city’s meetings, events and conventions market, and increase hotel occupancy within the Seattle Tourism Improvement Area, if passed.
The Seattle Tourism Improvement Area encompasses the city’s downtown core. James Sido, director of media relations at the Downtown Seattle Association spoke in support of Council Bill 120641 at the Seattle Economic Development, Technology and City Light Committee meeting on Sept. 14.
“Our job at Downtown Seattle Association is to create a terrific downtown experience for all and we rely on Visit Seattle and the funds they generate from the Seattle Tourism Improvement Area to bring visitors from around the world to enjoy a vibrant downtown,” Sido said.
According to a presentation by Visit Seattle, a switch from a set nightly fee to a percentage assessment establishes more stable funding for market development, benefits all Seattle districts and helps keep pace with inflation.
Since the COVID-19 pandemic, Downtown Seattle has worked to recover. The number of overnight visitors in the Seattle Tourism Improvement Area went from 21.9 million in 2019 to 10.7 million in 2020. There were 17.9 million visitors in 2022.
Visitor taxes play a significant role in funding utilized by the city. According to Visit Seattle, each household in Seattle would need to be taxed an additional $775 to replace the collective $699 million in visitor taxes received by the state and local governments in 2022.
The new Seattle Tourism Improvement Area would be established for a period of 15 years, beginning on Jan. 1, 2024.
The Seattle Economic Development, Technology and City Light Committee unanimously passed the replacement business improvement area. The full Seattle City Council is set to consider the legislation at its meeting on Sept. 19.
