Baltimore Tourism Agency Reports Falling Hotel Tax Revenue

Baltimore's hotel tax revenues plummeted by more than 61% in the wake of the coronavirus pandemic as a turbulent economy presents yet another obstacle to the industry, according to city tourism agency Visit Baltimore’s annual report.

In the report released Thursday, the quasi-public agency found that hotel tax receipts fell to $10.2M in the most recent fiscal year. The organization expected hotel taxes to exceed the $33M level from fiscal year 2019.

Additionally, Visit Baltimore’s budget for fiscal year 2023 anticipates lower occupancy tax revenues. The organization plans to receive more than $8.69M from that levy. That total is down from roughly $9.42M collected at the end of fiscal year 2022 and $14.6M in fiscal year 2019.

“The reality is we’re still in a post-pandemic recovery phase and continue to face challenges such as social injustice, the war in Ukraine, a rise in gun violence, high gas prices, labor shortages and rising inflation,” Visit Baltimore President and CEO Al Hutchinson, along with Board Chair Charles G. “Chuck” Tildon III, wrote in the report.  

Baltimore’s tourism industry has suffered a string of setbacks over the last several years. Tourism declined after the 2015 riots and only approached pre-riot levels as the pandemic hit.

Nevertheless, there are signs Baltimore’s tourism and hospitality industry is rebounding from the impact of the pandemic.  

Visit Baltimore’s annual report found reservations booked via its Housing Services and Call Center surged to nearly 47,000 in fiscal year 2022 after dropping to 18,300 the year before. 

At the same time, about 24.3 million domestic travelers visited Baltimore in 2021, an increase of 13.3% from the previous year.

Any rebound, however, may be short-lived, as tourism nationwide is expected to slow as a result of a turbulent economy.

Revenue per available room at urban hotels nationwide remained well above 2021 levels, according to a CBRE report on the industry released in September. But hotel revenue has not returned to pre-pandemic levels. Overall gross operating profit for all hotels remained about 2% lower through July than at the same time in 2019.  

Soaring oil prices may hurt hotel profitability. The utility cost per room, according to CBRE, is on pace to reach $2,813 by the end of 2022. The utility cost per room reached more than $1,800 last year and hit a recent low of about $1,500 in 2020.