Hotel-Generated State and Local Tax Revenue to Reach Records in 2023

The American Hotel & Lodging Association (AHLA) and Oxford Economics released new state-by-state projections on February 21, emphasizing that hotel-generated state and local tax revenue will exceed $45 billion nationally this year, reaching records across the states.

The nation’s hotel-generated tax revenue is predicted to increase 13.6 percent in 2023, with the top ten states with the highest gross increase from 2019 to this year being heavy hitters in the tourism industry (in order): Florida, California, Texas, Nevada, New York, Michigan, Massachusetts, New Jersey, Illinois and Maryland.

This rise in tax revenue is expected to come largely from growing hotel occupancy, which is expected to reach 63.8 percent this year, only 2.1 percent lower from 2019’s “normal” average.

The report found that the top ten states that will be seeing the highest occupancy rates this year are (in order): Hawaii, California, Alaska, Florida, District of Columbia, Arizona, New York, Washington, Colorado and Massachusetts.

Staffing is still considered the biggest impediment to recovery of the hospitality industry, with about 100,000 jobs currently open in hotels across the nation. As of December 2022, hotel wages reached historic highs to meet the demand for workers, with increased hotel benefits and flexibility. This year, it’s projected that hotels will employ 2.09 million people across the country.

“Hotels are making significant strides toward recovery, supporting millions of good-paying jobs and generating billions in state and local tax revenue in communities across the nation,” said AHLA President & CEO Chip Rogers. “To continue growing, we need to hire more people. Fortunately, there’s never been a better time to be a hotel employee, with wages, benefits, flexibility and upward mobility better than ever before.”