All the information isn't in yet, but it appears that revenue from the lodging tax in 2024 may end up being less than what was projected in the 2024 budget. Reporting to the Common Council Finance Committee in January, city treasurer Heather Campbell is recorded in the minutes as saying, "We won't really know until the end of March what that number looks like. We can see it looks quite a bit lower versus where we were in 2023 and compared to the budget, and then you can see it looks very low compared to 2025. I think that's one of the most aggressive numbers but having said that, remember there's going to be a one percent increase that takes place." We may find out more about the status of lodging tax revenue later today, when Campbell makes her monthly report at the informal Common Council meeting.
It has been suggested the optimistic projections for lodging tax revenue in the 2024 and 2025 budgets were based on the expectation that there would be more hotel rooms coming available. Although no new hotels have opened recently, there are several that have been proposed and a couple that are currently under construction. At last week's Industrial Development Committee (IDA), Mike Tucker presented an analysis of the available hotel rooms in Hudson, which was prepared by Columbia Economic Development Corporation (CEDC). The study shows there are currently six hotels in Hudson, providing a total of 155 rooms.
The study does not include three smaller hostelries that identify themselves as hotels: The Amelia Hotel, 339 Allen Street (8 rooms); The Hudson Navigator, 251 Allen Street (9 rooms); and The Hudson Mariner, 26 Warren Street (5 rooms). The addition of these 22 rooms brings the total number of hotel rooms currently available in Hudson to 177.
The study also showed there are currently two hotels under construction—The Pocketbook Factory, 549 Washington Street (40 rooms), and Hudson Public (Galvan), 401 Warren Street (30 rooms)—and two hotels that have been proposed—Hudson Mansion (Casetta), 601 Union Street (40 rooms) and Hudson House (McKinstry mansion), 620 Union Street (50 rooms). These four projects will add another 160 hotel rooms.
The study did not include a fifth hotel that has been proposed for 10-12 Warren Street by Ben Pinzler, who owns the Whaler, the Mariner, and the Navigator. This hotel would have 27 rooms, which brings the total number of rooms in proposed projects to 187.
By Gossips' calculation, the current number of hotel rooms (177) and the number of rooms in projects in progress or proposed (187) brings the total to 364.
The CEDC analysis also looked at room rates on two different dates: March 12, 2025, and July 4, 2025. The data is shown on the chart below. Predictably, the least expensive hotel rooms are at the St. Charles Hotel, the most expensive are at The Maker.
Update: At the informal Common Council meeting tonight, city treasurer Heather Campbell reported that the amount of lodging collected so far for 2024 is $439,739. What was budgeted for lodging tax revenue in 2024 was $632,500. There is still some lodging tax for 2024 yet to be reported, but it is anticipated that the actual amount will only be about 80 to 85 percent of what was budgeted.
The budget for 2025 set the projected revenue from lodging tax at $750,000.
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Yes, they were too optimistic about the lodging tax projections, especially this year. I don’t think we’ll see any new rooms available this year, the weather is getting warmer but none of these are close to opening. And I really don’t think the “Hudson House” one is going anywhere, they were approved years ago and there’s been almost no movement at that property.
ReplyDeleteAlso, since the no-data backed STR restrictions went into effect the number has been reduced by half, with more to go away since many were given a 5-year exemption that will soon expire. Also, has a single one of these become long term rentals? I haven’t heard of one, but many have been sold to wealthier weekenders who don’t need to rent them so they sit empty. At least for now, full time residents can host guest and help pay to keep their mortgages and taxes paid.
But eventually these hotel rooms will be available and will bring in much needed revenue through lodging taxes, sales taxes, parking, jobs and keeping our restaurants packed and small businesses afloat—most of which we would not have around to enjoy during the week if it wasn’t for tourism. Many of these places will host weddings, so there will be an induced demand. And off peak times will create enough price competition that younger and more middle income people will have the opportunity to experience our city. I was all for raising the lodging tax rate. These are the alternative ways to raise revenue for the city without continuing to increase the burden on residents.