The Hyatt Regency Huntington Beach Resort and Spa (foreground) and the Hilton Waterfront Beach Resort in Huntington Beach, California, Thursday, May 5, 2022. (Photo by Jeff Glitchen, Orange County Register/SCNG)
Tourists visiting Huntington Beach may soon see prices increase when staying at local hotels and short-term rentals.
The city is considering a 2% increase in hotel rates paid by tourists, with the money to be used for city promotion, as part of an effort to keep Huntington Beach competitive and recognized as a Southern California destination, officials said.
Currently, tourists staying in the city pay a 14 percent surcharge on their room rates, which is split between the city and the Huntington Beach Convention and Visitors Bureau, a nonprofit tourism marketing agency.
The majority of the revenue, 10 percent, comes from city taxes that go into the city’s general fund. The remaining 4 percent, or about $7 million a year, goes not to the city but to the Huntington Beach Convention and Visitors Association through the Tourism Business District.
The Huntington Beach Convention and Visitors Bureau wants to raise more money to continue promoting Huntington Beach and attracting tourists, and would need the city’s consent to increase that tax to 6 percent. The city is not considering raising the 10 percent transient occupancy tax.
The City Council is scheduled to hold a public hearing on the matter on Tuesday, June 4. If approved, the rate increases could take effect as early as July.
The increase will bring an extra $3 million a year to the nonprofit Huntington Beach Convention and Visitors Bureau, bringing its total to $10 million annually. Twenty-one hotels and 200 short-term rentals contribute to the citywide tourism district established in 2002.
The increase brings Huntington Beach close to the highest surcharges other Southern California cities impose on guests. Tourists in Anaheim stay in hotels that pay into the city’s tourist district, which includes the resort area around Disneyland, and are assessed a 2 percent surcharge to be paid into the tourist district. The city also has a $15 hotel tax. In San Diego, tourists pay up to 12.5 percent, depending on the size of the hotel and the city’s overall tourist and tourism assessment.
Hotels can choose to pay for tourism district assessments themselves, but the cost is usually passed on to guests.
In a presentation to the council, the Huntington Beach Convention and Visitors Bureau argued that several Southern California destinations are adding new travel and lodging experiences “to draw tourists away from Huntington Beach.”
Without an increase in the Huntington Beach Convention and Visitors Bureau’s marketing budget, the city’s profile will decline compared to other destinations, and overall city revenue could decrease, the bureau said.
Marketing agencies estimate that more than 2 million people from outside the county visit Huntington Beach annually.
Several local businesses and hotels sent a letter to the City Council saying Huntington Beach could lose tourists to other cities along California’s coast in the coming years and urged the city to approve the fee increase.
