A portion of Lancaster County’s hotel tax is expected to be diverted from the Pennsylvania Dutch Convention and Visitors Bureau to the county’s convention center beginning this spring to shore up the center’s finances, a bureau official said.
The Lancaster County Convention Center Authority has informed the visitors bureau that its 20 percent share of the county’s 3.9 percent tax on hotel room stays would be diverted beginning in early April, bureau President and CEO Chris Barrett said.
The visitors bureau has planned ahead with about $2.5 million of its own reserves, which will help fund operations in lieu of the nearly $800,000 it expects to lose this year, he said.
“It should not affect us this year at all,” Barrett said.
Agreements created among stakeholders to construct the downtown Lancaster center several years ago call for officials to automatically shift the hotel tax revenue away from the visitors bureau if the center’s bond reserves get too low, Barrett said.
Meanwhile, a task force of current and former visitors bureau officials is starting work on recommendations toward a long-range solution, he said. It expects to issue recommendations to stakeholders in the next two months, Barrett said.
The $177 million convention center and Marriott at Penn Square opened more than two years ago and is seen as an enhancement of the city’s offerings for visitors. It operates at a loss to be made up by hotel tax revenue.
Lancaster County collects a 3.9 percent tax on hotel room stays and an additional 1.1 percent excise tax. The excise tax also is assessed on smaller lodging establishments such as bed and breakfasts.
Under normal circumstances, 80 percent of the hotel tax goes to the convention center authority and 20 percent goes to the visitors bureau. Excise tax revenue goes to the visitors bureau.