Mayor: Lodgers’ tax revenue ‘incredibly healthy’

City expects to bring in $1.2M more in 2019 than in 2018

Tourists like John and Kathy Collins are the bread and butter of Santa Fe’s economy.

For the past four decades, the San Diego couple, who were looking in the window at a jewelry store off the Plaza, have been traveling to the city twice a year: once in July and again in the winter. They didn’t remember exactly how much they paid for their stay at the luxurious Inn and Spa at Loretto on Old Santa Fe Trail this week but guessed it was in the neighborhood of $225 to $250 a night, a rate neither thought was unreasonable.

“No,” Kathy Collins said Monday when asked if the price was too high. “Go to New York.”

While the Big Apple draws millions of visitors annually, little ol’ Santa Fe continues to be a hot tourist destination — and city coffers are growing in kind.

Lodgers’ tax revenue in Santa Fe is up for the seventh consecutive year, according to city officials.

“The lodgers’ tax is really looking incredibly healthy,” Mayor Alan Webber said. “It’s a testimonial to the brand ‘Santa Fe,’ obviously. People like to come here but also the quality of the hospitality and the hospitality industry is really substantial.”

Between 2018 and 2019, lodgers’ tax revenue is expected to increase more than 9 percent, from roughly $12.2 million to $13.4 million — a $1.2 million increase, Webber said.

“Generally speaking, I think it’s a very positive report on the quality of the tourism industry right now when it comes to the people who are running hotels, motels [and] bed and breakfasts,” the mayor said.

Business owners also are cashing in. “They’re able to charge more per head in bed,” Webber said.

Average daily rates citywide increased from $139.78 a night in 2018 to $144.28 last year, said Randy Randall, head of Tourism Santa Fe, the city’s convention and visitors bureau. For the downtown area, average daily rates grew from $186.63 a night to $191.90. Lodging facilities along Cerrillos Road also posted a year-over-year increase, from $88 to nearly $92.

“In our marketing efforts, we can’t just focus on the person who can pay 200 bucks a night,” Randall said. “We have to focus on the person who wants

to come to Santa Fe but can only spend 100 bucks a night.”

Citywide occupancy rates grew slightly from 67.7 percent to 69.3 percent, Randall said.

“We’re well above the national average” of 61.7 percent, he said.

Randall attributes the projected increase in lodgers’ tax revenue to several factors, including a strong economy.

“As the economy grows, clearly the ability of one to have more expendable income grows,” he said. “Leisure travel requires expendable income.”

The city has also benefitted from a good and consistent marketing effort that promotes Santa Fe as the City Different, Randall said.

“I’m patting the team on the back, absolutely,” he said about his staff and various contractors. “I don’t care who the orchestra leader is. Without good musicians, it just doesn’t play.”

Short-term rentals and efforts by the city to beef up the collection of lodgers’ tax revenue from those businesses is also contributing to the increase. Four years ago, for example, the city collected a little more than $500,000 in lodgers’ tax revenue from short-term rentals. In the last fiscal year, the number climbed to just shy of $2 million.

“Based on information I’m given, we actually now have more short-term rental bedrooms available in the historic downtown than we do hotel rooms,” Randall said. “We literally doubled the supply ... and at same time have seen this phenomenal growth [of lodgers’ tax revenue] anywhere from 5 to 10 percent per year.”