Good compromise on hotel tax

July 05, 1994

This much can be said of the Schmoke administration: When shown that a proposal would be harmful to the city, the mayor is capable of altering his stand. The latest proof of this is the wise compromise reached on a proposal that could have damaged the city's hospitality industry by raising the hotel tax.

Mayor Kurt L. Schmoke initially wanted to increase the room occupancy tax from 7 to 9 percent in 1996 to finance the city's share of the $150 million Convention Center expansion. After it was shown that this increase might kill Baltimore's hopes for a hospitality boom just as the long-awaited larger convention facility opens, the mayor backtracked. He agreed to a compromise tax which would "blink-on" only if expected increases in hotel revenues prove insufficient to cover the debt service on $63 million in revenue bonds.

This compromise should enable Baltimore City to strengthen its competitiveness among the East Coast's cities at a time when nearly everyone is introducing new and better convention facilities.

Convention centers alone are not enough to turn a city into a conference mecca. The host city must offer more. Because of its proximity to Washington, D.C., and Philadelphia, which both have splendid new meeting facilities and plenty of attractions, Baltimore is in a tough fight for business.

Baltimore's ability to compete ought to be enhanced by the opening of the larger convention facility in two years. The expected increase in convention business is also likely to encourage new hotel construction in the city, particularly since several new Inner Harbor attractions are scheduled to open in time for the city's bicentennial in 1997.

A year ago, the Schmoke administration identified aggressive promotion of tourism as a key economic development tool for the city. With the specter of a burdensome new hotel levy removed, the hospitality industry now ought to move forward and make sure that tourism will reach its potential. In this regard, untapped opportunities abound.

Particularly promising for future business expansion is the recent explosive growth in passenger traffic at Baltimore-Washington International Airport. Combined with a steady increase in international connections, the airport ought to generate more and more business for the city's hotels.

Tourists who visit Washington, D.C., also offer new potential. The frequent MARC commuter trains are currently limited to weekdays, but they have brought Baltimore within quick and inexpensive reach of the nation's capital. Yet tourists in Washington don't seem to know how close Baltimore and its sights are. This is an oversight that better promotion efforts can correct.

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