Hermosa Beach voters will have the chance to vote on whether to raise the city’s hotel bed tax in November – setting up a battle between proponents and some local hotel operators who oppose the idea.
Local resident Marie Rice told the City Council Tuesday evening that two dozen activists were able to gather 569 signatures in 12 days in favor of placing the measure on the ballot, surpassing the 332 votes needed. (The signatures were submitted to City Clerk Elaine Doerfling on Tuesday and will need to be verified before the tax increase can officially be placed on the ballot).
The initiative would raise Hermosa’s transient occupancy tax (TOT) from 10 percent to 12 percent and be tacked onto hotel, motel and short-term rental bills paid by visitors. Proponents hope the revenue would go towards improving infrastructure and services such as streets, sidewalks, sewers, public buildings, fire and police departments, the library, and parks.
“A small increase can mean big things for Hermosa,” Rice told the council.
The increase would bring Hermosa closer to other top tourist destinations in Los Angeles, such as Santa Monica, which levies a 14 percent hotel bed tax; Redondo Beach, which has a 12 percent tax; and Beverly Hills, which charges 14 percent. (Manhattan Beach charges 10 percent).
Hermosa generates about $2.2 million a year from the hotel bed tax and could generate an additional $440,000 a year with the increase, according to City Finance Director Viki Copeland. A larger windfall could come later since three hotels are expected to be built in coming years — Clash, Strand + Pier and another project planned for the south side of the pier on 11th Street.
Proponents also said the tax is a way to fill city coffers following the defeat of oil drilling proposal Measure O in March, and that vacationers will not be deterred from visiting Hermosa Beach based on a slightly higher bed tax. The tax would add $5 to a $250 bill, for example.
However, local hotel operators are already voicing their dissent.
“I think it’s absolutely bad,” said James Graham, general manager of the Sea Sprite Motel. “The economy just seems to be bouncing back for us. It seems like a bad time to try to pass [this tax] on to guests. Most of our clientele are families taking impromptu vacations. Raising the bed tax is going to affect their thought process.”
Marje Bennetts, general manager at the Beach House, said she also has concerns. She said the hotel advertises Hermosa’s lower bed tax to groups of business travelers who are comparing rates among cities in Southern California.
“We would prefer it stay at 10 percent,” Bennetts said. “Many other [cities] up the coast are higher than us. A group-meeting planner might be interested in coming here to save some money … I don’t know that the leisure traveler is affected, but the corporate group market is.”
Local resident Dency Nelson, who helped gather signatures, said a higher bed tax would not hurt occupancy.
“It’s been suggested that when TOT increases, occupancy drops. That’s a blatant, absolute lie,” he said. “There’s nothing to show that that happens. The only time that comes into consideration is large convention facilities.”
The petition also stipulated that short-term rentals of less than 30 days, such as those listed on Airbnb, would be subject to the 12 percent tax, assuming the city takes steps to regulate the rentals. The city code currently prohibits short-term rentals of less than 30 days in residential zones
