Are you checking in? Hotel tax revenue this quarter is expected to be the second highest on record.

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This summer, you may find it hard to find a hotel room in Juneau on short notice, especially as the first Ironman in Alaska approaches.

“Unless someone cancels or something happens, we’ve been totally booked this time of the week,” said Cleveland Mitchell, manager of the Frontier Suites hotel near the international airport. of Juneau. However, Mitchell and other hotel operators said they were already very busy.

This translates into optimistic projections for hotel bed tax revenue for the City and Borough of Juneau.

Juneau’s hotel bed tax revenue for the July-September quarter is expected to be the second highest on record, according to the CBJ budget. It follows last year’s record.

Last year’s revenue totaled approximately $1 million in just three months – three times the forecast – and was up $650,000 from the amount budgeted.

According to CBJ Chief Financial Officer Jeff Rogers, revenue this year won’t be as big, but should still be close behind at $860,000.

“Last year’s number for this quarter was unprecedented,” Rogers said. “Hotels cost a lot more today than they did a year or two ago,” Rogers said.

Why are incomes so high?

Rogers said he couldn’t pinpoint a specific reason why last year’s hotel bed tax revenue hit record highs, though he said the increase CBJ’s hotel and motel tax rate of 7% to 9% — which voters approved in 2019 to be spent on Centennial Hall renovations for 10 years — certainly played a role. He also credited ongoing inflation and an influx of independent travel as possibly contributing to the rise.

“We’re seeing higher hotel costs, we’re seeing the tax rate is 2% higher than it was before,” he said.

Lacy Glaum, sales representative at Four Points by Sheraton and the Westmark Baranof Hotel, said she noticed the uptick.

“Certainly I would say the whole city is more expensive to stay this year compared to last year and I would say it’s supply and demand because there’s so much higher demand this year. than last year – the prices are definitely higher,” she said.

Clarise Larson/Juneau Empire An employee of the Westmark Baranof Hotel in downtown Juneau takes out a trash can at the entrance of the hotel. The hotel is already fully booked for Ironman Triathlon Week, which is due to take place next month in Juneau.

Last year’s record total occurred under similar but distinct circumstances.

Rogers said when the pandemic started, the July-September quarter was significantly lower due to lower travel and tourism. This resulted in hotel bed tax revenue being less than a third of what revenue would increase through the following year. He said a big factor he attributes to last year’s surge in income was quarantine restrictions. The hotels have found new life housing people who traveled to Juneau for work requiring quarantine and also accommodated independent travelers who came to Juneau.

Rogers said an increase in hotel tax revenue means more money can be invested in the programs the money is allocated to, which include about 7% for Centennial Hall operations and improvements and 4% for tourism promotions outsourced to Travel Juneau. In some cases, when hotel bed tax revenue exceeds forecast, a small amount is available for other tourism or accommodation related matters. On Friday, Rogers said the city introduced a $20,000 expense allowance from the hotel bed tax revenue fund to contract an outside firm to collect data on the number of short-term rentals in the city. region.

Liz Perry, president and CEO of Travel Juneau, said Juneau welcomed “quite a few” independent travelers last year, as well as many smaller ships with stopover points in Juneau. Both contributed to the number of travelers staying in hotels – and the number of independent travelers this year appears to be similar.

Rogers said while the amount of bed tax collected this quarter is expected to be lower than the previous year, it is still the second highest figure the city has ever recorded.

This season is a marathon

Juneau’s hotel room and Airbnb’s registered capacity is about 1,300 rooms, Perry said, which is far less than the roughly 3,000 participants, visitors and supporters who will come to town for the Ironman triathlon. which should take place in less than a month.

Perry said that in the early stages of making Juneau the first Ironman host city in Alaska, there was a lot of talk around the capacity Juneau can hold. There was strong pressure for people to open their homes for the race, which she said was a success and noted that “athletes are usually housed”. Perry said she expects Ironman to bring a significant amount of hospitality-related revenue to the local economy, with an estimated economic impact of $7 million, and “that’s a conservative estimate,” said Perry. said Perry.

“Hotel prices have gone up and the race is a huge opportunity for businesses in Juneau,” Perry said.

Rogers said he would not be surprised to see hotel room rates increase significantly during this race week, but even with the influx of visitors due to the race, he is confident that the This year’s tax revenue forecast is quite accurate and will likely remain below last year’s amount. He said there was always a chance the forecast could be too low, but given last year’s unexpected jump, this year’s forecast is discounted to a reasonable median amount. However, according to several hotel operators, they are already seeing much higher rates as well as booking numbers that far exceed last year in Juneau. The amount of hotel bed tax revenue the CBJ reports each quarter is not directly correlated to price or occupancy in Juneau, but it does provide insight into how each year compares to one another. .

“Rates are very high in this area, so we will see very high rates, which means very high taxes during this time,” Rogers said. “I think Ironman is going to be very tough to wind up, obviously there are a lot of people coming to town, but the vast majority will only be there for a few days.”

Glaum said peak times extend beyond when Ironman is in town, noting that “this season we’ve been consistently sold out pretty much all of June, and we’re almost completely sold out. sold out in July and August as well – this year is going really well compared to last season,” she said.

She said she would attribute the increase in demand due to the opening up of tourism, and an increase in independent travel has been “much better” this year than in previous years. She said it looks like the whole summer will be in full swing and notes that it feels like a pre-covid summer. Glaum said one of the main reasons she thinks this summer has been so busy and booked is due to the upcoming Ironman race.

“Ironman 100% plays a part, like 100% of the whole city is sold out,” Glaum said.

• Contact journalist Clarise Larson at clarise.larson@juneauempire.com or (651)-528-1807. Follow her on Twitter at @clariselarson.


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