San Luis Obispo collects record amount of tourism lodging revenue

Hotels off Los Osos Valley Road in San Luis Obispo.
Hotels off Los Osos Valley Road in San Luis Obispo.

San Luis Obispo collected more than $6.8 million in transient occupancy tax revenues last fiscal year — the highest collection of so-called bed tax in the city’s history and 12 percent over the previous year.

The city’s hotels, motels and other lodging properties have returned to steady occupancy rates — the average annual occupancy rate was 73.1 percent — with more than 20 sell-out weekends in 2014-15, according to city tourism officials. The average daily rate for a room increased nearly 7.5 percent to $129.17, said Nipool Patel, co-owner of the Lamplighter Inn & Suites and chairman of the city’s Tourism Business Improvement District board.

“I think that’s from marketing efforts and also the economy getting better, too,” Patel told the San Luis Obispo City Council during a presentation of the tourism district’s annual report Tuesday.

$6.8 million Transient occupancy tax collected by the city in 2014-15

The district, established in 2008, collects a 2 percent assessment of gross receipts from city hotel rooms, with the funds going toward tourism promotion. It raised about $1.36 million in 2014-15, with revenues used for marketing, events promotion, trade shows and partnerships, including one with Cal Poly Athletics.

Separately, the city receives transient occupancy tax revenue from a 10 percent tax that’s added to overnight stays at the city’s hotels, motels, bed-and-breakfasts and — very recently — homestays, or temporary rentals in owner-occupied homes. There are 38 standard lodging properties in the city with a total of about 2,100 hotel rooms. There are eight permitted homestays, city tourism manager Molly Cano said.

The amount of bed tax money collected has increased every year in the past five years, according to the San Luis Obispo Chamber of Commerce, which leads public relations efforts for the tourism district. Transient occupancy tax is the city’s fourth-highest revenue generator, behind general sales tax, property tax and the city’s local half-percent sales tax measure.

“One of the things we’re looking at is getting the homestays more involved in our marketing activities now that they’re getting fully permitted,” Cano said. “It’s been a slow start to this point, but we’re looking forward to them being more involved in what we’re doing.”

$129.17Average daily rate for overnight stays

The tourism program went through a re-branding in the 2014-15 year, including its “ShareSLO” campaign, which included new logos, blog design and social media. The Tourism Business Improvement District’s marketing efforts were led by a new team of Barnett Cox & Associates and StudioGood.

In addition, the chamber of commerce, which operates the Visitor Center in partnership with the city, saw a record number of visitors, with more than 80,000 walk-ins, 6,000 phone calls and nearly 2,000 emails, according to a news release.

“You’re working your butts off,” Councilwoman Carlyn Christianson told Cano and Patel at Tuesday’s meeting. “I’m really impressed.”

Mayor Jan Marx said she appreciated that tourism officials have been sensitive to neighborhood concerns and are directing trail users to other open spaces to decrease overuse of popular areas such as Bishop Peak.

The City Council adopted a resolution to continue the tourism district and levy the 2 percent assessment on hotel stays in the 2015-16 fiscal year. A public hearing on the proposed assessment was set for the council’s Nov. 3 meeting.

Cynthia Lambert: 805-781-7929, @ClambertSLO