The city of Palm Springs is planning a new tax on hotels and short-term rentals that would be dedicated to funding an upgrade of the Palm Springs Convention Center. It already has the backing of the city’s downtown hotel association.
All hotels and short-term rentals, including those on Airbnb and Vrbo, would be required to remit 1% of their revenue to the city each month. The levy, which would be on top of the 12.5% to 16.5% hotel stays are already taxed in Palm Springs, is expected to generate $4.1 million per year, which the city would use to pay the debt required to finance the $100 million convention center improvement.
The money would be collected by creating a “tourism improvement district,” whose boundaries would encompass the entire city. The 1% would be an “assessment,” which is officially distinct from a tax because it’s set aside for a specific purpose and not put in the city’s general fund like other taxes. But hotels and those renting out their homes could collect an additional 1% from lodgers, meaning it would function as a tax.
Several public hearings must take place before the council can formally approve the measure. All hotels and short-term rentals must be notified as well.
Much of the local tourism industry is in support of the measure. At least half of all hotels and short-term rental owners have signed off on the new tax, Palm Springs Director of Finance and Treasurer Kristopher Mooney reported during a city council meeting Wednesday, April 8.
“This is about ensuring Palm Springs remains a top-tier destination for meetings and conferences well into the future,” Peggy Trott, Chairwoman of P.S. Resorts, said in a news release. “The Tourism Improvement District provides the dedicated funding needed to modernize our Convention Center, attract high-caliber events, and continue welcoming large groups and visitors whose spending supports our entire local economy. We’re proud to help lead this effort to invest in the long-term success of our city.”
Palm Springs Mayor Naomi Soto also praised the measure during the city council meeting.
“I think this is just such a reflection of the hospitality industry recognizing the importance of our convention center, coming together and collaborating,” she said. “(It’s) another really impressive public-private relationship that we have to be able to make these investments in a building that drives so much of our economy.”
The city is seeking to improve the convention center to stay competitive in attracting conferences to the area. Local officials say only a state-of-the-art facility will insure the city continues to remain a desirable location.
While adding LED screens and more outdoor areas, the plans for the convention center also include a walkable district connecting the center to downtown Palm Springs.
The city is currently in the process of financing the upgrade. Construction was initially expected to begin in 2027 when the project was first announced at the beginning of last year.
(This story was updated with new information.)
Sam Morgen covers the city of Palm Springs for The Desert Sun. Reach him at smorgen@gannett.com.
This article originally appeared on Palm Springs Desert Sun: New hotel, Airbnb tax would help Palm Springs Convention Center
Reporting by Sam Morgen, Palm Springs Desert Sun / Palm Springs Desert Sun
USA TODAY Network via Reuters Connect
