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Marlborough Considers Hike in Hotels Tax

October 25, 2010 – A plan to increase the tax on hotel rooms in Marlborough is getting support from an unlikely group of business leaders in the city: hotel managers.

Richard Tomanek, who manages more than 200 hotel rooms at the Embassy Suites Hotel in Marlborough, said he’s open to the idea of increasing the tax on hotel rooms, if the proceeds go toward economic development efforts, as has been proposed.

Charles De Land, general manager of the Homestead Studio Suites in Marlborough, said he’s willing to support the tax too, if it will encourage more business investment in the city. Supporters of the tax say that more businesses in the city equates to more business travelers sleeping in their hotel rooms.

“I’m not pro taxes, but I’m pro funding economic development,” Tomanek said.

Revenue Generation

Marlborough City Council President Arthur Vigeant has proposed increasing the tax on hotel rooms from 4 percent to 6 percent and directing the new revenue, which could total more than $500,000 toward economic development. That includes some additional funding for the Marlborough Economic Development Corp., which already receives about one-fifth of its funding from the city. Both Vigeant and Tomanek are on the Marlborough Economic Development Corp.’s board of directors.

In the 1980s communities were allowed by state law to implement up to a 4 percent local option hotel room tax. In an effort to give municipalities more flexibility in revenue generation, the state last year amended the law once again, allowing communities to charge up to a 6-percent tax on hotel rooms. Soon after, many communities in the area took advantage of the change. Worcester increased the rate in October 2009 and Westborough, Framingham and Shrewsbury did the same in January. In April, Natick increased its rate to 6 percent.

Marlborough has not increased its hotel tax rate since 1985 and it sits at 4 percent.

MEDC President Arthur Bergeron, who’s also a lawyer at the Worcester firm Mirick O’Connell, already has a three-point plan of how economic development funds should be spent, whether they are allocated to the MEDC or not. The first step, he proposed, is to produce a master plan with a goal of increasing the commercial tax base by $1.5 million during the next decade. hotels_pg24_chart

The Marlborough City Council’s legislative and legal affairs committee is considering the question. City councilors have asked for more information on how money could be brought in through the tax and what it would be used for.

While the hotel room tax hike plan is receiving some support from some local hotel managers, not all are thrilled about the idea.

“I don’t support it at all,” said Mary Simone, area general manager for the Courtyard by Marriott in Marlborough and Westborough.

Instituting a new tax would specifically hurt the weekend traveler clientele, Simone argues. Hotels in Marlborough get business from the New England Sports Center complex, which hosts hockey and ice skating games and tournaments many weekends. The events attract families from all over New England.

In an age of online travel search engines, Simone said customers search for the best deals.

“If you start raising the rates too much people…will drive down the road and stay somewhere else,” she said.

In defense of the plan, Bergeron said that Marlborough hotels are at an economic advantage compared to other communities because the city does not have the tax.

But, because so many other communities in the area do have a 6-percent rate, the city’s hotels will not be at a disadvantage because of a few extra dollars on the average hotel room.

Other hotel managers are withholding judgment.

“I’m all for trying to figure out a way to increase economic development in the city,” said Richard Skinner, general manager of the Best Western Royal Plaza Hotel in Marlborough, which has 431 rooms. “And at least now political leaders are asking our input, which is a nice change.”

This story originally appeared here