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Hotel tax revenues rise

March 14, 1999|By SCOTT BUTKI

Proceeds from the 3 percent motel-hotel tax in Washington County hit an all-time high of $426,134 in fiscal 1998.

Hotel managers and the head of the Hagerstown-Washington County Convention and Visitors Bureau credit increased tourism and slightly higher room rates with increasing revenue.

Howard Johnson in Halfway collected the most tax, $70,986, according to the Washington County Treasurer's Office. There were 37 hotels and motels collecting money last year.

Howard Johnson has also raised the most money so far in fiscal 1999 with $42,162. The most recent numbers are from January.

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The next highest tax-grossing hotels in fiscal 1998 were, Venice Inn, with $55,973; Ramada Inn, with $49,733; Hampton Inn, with $48,782; and Four Points, with $33,499.

All are on Dual Highway.

The visitors bureau became a private enterprise July 1, 1997.

The main reason the bureau privatized was because industry members wanted more of its money spent on promotion and marketing and less on administration costs, said Ben Hart, executive director of the bureau.

Before privatization about 60 percent of the bureau costs involved administration salaries, he said. That percentage is now about 30 percent, or $57,000 a year, he said.

About 63 percent of the bureau's budget comes from the tax, Hart said. Another major revenue source is advertising in the bureau's visitors guide.

Hart said that Washington County has been getting many more visitors because of Prime Outlets at Hagerstown, which opened in August.

Market research says there have been about 1.6 million shoppers at Prime Outlets at Hagerstown since it opened . About 40 percent were from Baltimore and Washington, D.C. areas, the market research report says.

However, hotel managers aren't sure if that is helping them.

The actual number of visitors at local hotels has been pretty stable, said Jim Kell, Ramada Inn and Convention Center general manager. Where the hotel has been getting more money recently is from conventions, Kell said.

Four Points is also getting more visitors from conventions than from Prime Outlets, said David Malugin, manager of Four Points.

The hotel has also been getting more residents lately who came to the region via new U.S. Airway Express flights from the Hagerstown Regional Airport, he said.

He has seen increased business of about 5 to 7 percent just during the nine months he has been manager, he said.

The bureau has focused more attention in recent years on getting more conventions held in Washington County, Hart said.

Those efforts resulted in a commitment by an American Legion organization, The Society of Forty Men and Eight Horses, to hold its annual convention in Hagerstown in September 2001. With as many as 3,000 people expected to attend it will be the largest convention held in Washington County.

The 2,000 to 3,000 veterans expected to attend the convention could pump more than $2 million into the community and fill between 1,000 and 1,800 hotel rooms, according to bureau officials.

While the number of local hotels has increased in recent years - most recently with the Comfort Inn opening in June 1998 - that is probably not a factor in the increasing tax proceeds, Hart said. More hotel rooms does not necessarily mean more guests, he said.

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