Some Orange County cities are reporting higher than expected tax revenue from hotels this year, following an increase in visitors as pandemic restrictions ease.
During a March 8 Costa Mesa City Council meeting, Finance Director Carol Molina said that the city is on track to receive $1.1 million more in hotel tax revenue than last June’s projection for the 2021–2022 fiscal year.
The city previously expected to receive $5.6 million in transient occupancy tax—or hotel tax—which is now projected to be $6.7 million.
While the number of visitors and tax revenue increased, the city won’t see a full recovery from the COVID-19 pandemic yet, Molina said.
“[While] higher than we had anticipated ... this revenue stream is just not yet back to pre-pandemic levels,” she said. “The city’s prior pandemic amounts hovered around 8 to 8.5 million dollars a year, so we’re not quite there yet.”
Other Orange County cities are seeing growth in hotel tax revenues as well.
Newport Beach had originally adopted a budget expecting $19 million in transient occupancy tax revenues, which is now projected to be $25.6 million, a 34 percent increase.
Huntington Beach expected $10.7 million in hotel tax revenues for the 2021–2022 fiscal year, a stark increase from the $6.8 million in the previous year. The city has not released an adjusted projection as the current fiscal year is coming to an end in a few months.
Laguna Beach, similar to Huntington, has not released its adjusted projected hotel tax revenue for the 2021–2022 fiscal year. However, the original projection—$7.3 million—was a $3 million increase from the previous year’s $4.6 million.