HEADLINE
GOES
HERE
SUBHEAD GOES HERE
TOT IMPACTS
TO BUSINESS
Risks to Consider
Attachment 2
2 • Taxes compound across room blocks & multi-night stays for group business, conferences, & tournaments • Guests consider total costs-including parking, resort fees & taxes-additional tax increases overall expenses • Destinations are chosen for affordability; travelers seek alternatives, shifting tax revenue to nearby cities • Limited-service/midscale hotels compete mainly on price • Planners/repeat visitors can create long-term competitive loss by establishing new booking patterns • Higher lodging costs hit harder during economic uncertainty/inflation • OTAs let consumers compare total stay costs, highlighting tax differences • Fewer visitors reduce revenue beyond TOT (sales tax, restaurant, retail) • Employment in hotels and related food, event, and retail services is affected Anticipated increase in TOT revenue may not fully materialize due to reduced room-night demand. The industry faces rising labor, insurance, utility, and operating costs; additional tax burdens may further pressure margins/staffing decisions.
IMPACTS TO INCREASING TOT
TOT TAX IMPACTS
GROUP BUSINESS
*Average
Daily Rate
Group
Revenue
Without Tax
Current Taxes
(8% TOT, 3%
BIA)
+1% Point
(9% TOT, 3% BIA)
+2% Point
(10% TOT, 3% BIA)
+3% Point
(11% TOT, 3% BIA)
Average
**Group Size
259 rooms
$194.85 $50,466.15 $5,551.28 TAX
TOTAL Cost of
Program $56,017.43
$6,055.94 TAX
TOTAL Cost of
Program
$56,522.09
$6,560.60 TAX
TOTAL Cost of
Program $57,026.75
$7,065.26 Tax
TOTAL Cost of Program
$57,531.41
*YTD through April 2026
**IDSS group room size reflects that of TCM’s Destination Sales Executive Only
TOT TAX IMPACTS
ON HOTEL SEGMENTS
OF BUSINESS
*Average
Daily
Rate
Current Taxes
11%
(8% TOT, 3% BIA)
+1% Point
12%
(9% TOT, 3% BIA)
+2% Point
13%
(10% TOT, 3% BIA)
+3% Point
14%
(11% TOT, 3% BIA)
Transient $185.25 $205.63 $207.48 $209.33 $211.19
Group $194.85 $216.28 $218.23 $220.18 $222.13
Contract $129.53 $143.78 $145.07 $146.31 $147.66
*YTD through April 2026
5 City/DMO TOT % TBID % Comments
Anaheim 15 2.0
Buena Park 12 2.0 $500k from city to operate Visit Buena Park Costa Mesa 8 3.0 BIA
Dana Point 10 Revised in 2025
• 1.5 on rooms over 190
• 1 on <190 rooms
2.5% & 1.5% increase in year 3
Garden Grove 14.5 2.5
HB 10 6.0
Irvine 8 2.0
Laguna Beach 12 2.0
Newport Beach 10 5.0 (MAP)
+
23 of TOT
• 23% of funds from TOT goes to online
marketing
• 5% Meetings Assessment Partnership (MAP)
10-year agreement
Santa Ana 11 2.0