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Why there’s support for a higher hotel tax and how it could help Centre County

The Atherton Hotel along Atherton Street, in April 2014. The Central Pa. Convention and Visitor’s Bureau is proposing an increase to the hotel occupancy tax in Centre County.
The Atherton Hotel along Atherton Street, in April 2014. The Central Pa. Convention and Visitor’s Bureau is proposing an increase to the hotel occupancy tax in Centre County. CDT photo

The Centre County Board of Commissioners is considering a measure that would raise the hotel occupancy tax from 2.5 to 5 percent, following a recommendation from the Central Pennsylvania Convention and Visitor’s Bureau.

Centre County has one of the lowest hotel taxes in the state, according to Fritz Smith, executive director of the CPCVB.

“Quite frankly, we want to grow the economy in Centre County,” he said at the Tuesday morning voting meeting of the commissioners.

The added revenue from increasing the hotel tax, Smith said, could help local nonprofits and expand tourism in Centre County, by making it a destination for sporting events, meetings, family travel, weekend getaways and more. By the CPCVB’s estimate, an increased hotel occupancy tax could garner $137 million in new visitor revenue and add 320 new hospitality jobs in the county.

Penn State is the driver of most overnight hotel accommodation in the county, he said, with 80 percent of hotel business related to the university.

“Centre County’s more than Penn State,” said Smith. “We think we have great tourism assets here in Centre County and we want to be able to tell that story.”

Centre County is home to several wineries, festivals, museums and historical societies, he said. But hotel occupancy rates are below the state and national averages. This year, the hotel occupancy average in Centre County was 63.3 percent. Statewide, it was 65.5 percent and nationwide it was 67.9 percent.

IMG_Mount_Nittany_Winery_2_1_LM81HB3G_L218987670.JPG
Mount Nittany Vineyard and Winery in Centre Hall attracts visitors who flock to Central Pa. wine trails. Photo provided

If a measure to raise the hotel occupancy tax passed, Smith said, the CPCVB would expand its grant program to fund more festivals and large events, put a satellite visitors center in Philipsburg, increase advertising and content on its website and improve its research into tourism and marketing.

Local business owners and advocates spoke on the importance of funding from the CPCVB Tuesday.

Grange Fair committee member and archivist LeDon Young said CPCVB funding for restroom climatization has been vital in making Grange Park in Centre Hall a year-round tourism and event destination. In March, she said, Grange Park will host the Pennsylvania Alpaca Owners and Breeders Association Showcase for the first time.

A higher hotel tax would also be a boon for smaller hospitality operations, like bed and breakfasts and Airbnbs, said Joe Thomas. Thomas owns the Bed and Breakfast at the Rock Garden in Boalsburg, which only has five rooms and sees mostly Penn State traffic.

But, he said, his bed and breakfast is also tapping into the agro-tourism business and seeing more visitors who flock to nearby wine trails.

Jim Pollock, chairman of the Moshannon Valley Economic Development Partnership and Philipsburg Heritage Days, also extolled the value of funding from the CPCVB.

“We don’t have any hotels in our town, in Centre County. They’re across the street, in Clearfield County,” he said. Despite that, he hopes to see a hotel come to Philipsburg in the near future.

In 2018, 125 vendors and 23,000 people attended Philipsburg Heritage Days, Pollock said. CPCVB funding helps with marketing for the event, which drives many other businesses and events in the Moshannon Valley.

With CPCVB already bringing in nearly $800 million in tourism dollars every year, “the impact (of raising the hotel tax) would be tremendous,” said Board of Commissioners Chairman Michael Pipe.

He suggested discussing the issue further at the commissioners’ Jan. 8 or Jan. 15 meeting, after compiling testimonies of support from area nonprofits, businesses and tourism groups to demonstrate the measure’s importance to the public.

Enaction of a new hotel tax could happen as early as April 1, Pipe said.

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