Tourism in Gloucester

Currently every lodging establishment with over three rooms is required to
collect 9.7% of room sales for a sales tax. This means on a $175.00 room,
the actual charge is $191.98. An increase to 11.9% would mean that $175.00
room actually costs another $20.48. The lodging establishments bear the
highest sales tax rate in the city after cigarettes and liquor.

Currently the city's portion of the occupancy tax is 4%. Last fiscal year,
the city received $280,000 from the lodging establishments in Gloucester.
The city also received property tax revenue, water and sewer revenue,
license and permit revenue directly from the lodging, restaurants, whale
watches, art galleries and retail establishments in Gloucester. These
tourism related businesses also contribute 5% of their retail and meals
sales as a sales tax, and employment taxes on thousands of Gloucester
residents. Parking at the beaches brought in over $1,000,000 alone and
every car that paid to park was a tourist.

Currently the city has budgeted $23,000 to be spent on tourism. That is
less than 10% of what was collected last year from the occupancy tax portion
alone. Nearly every establishment is owner-operated. Many are seasonal.
No one has a budget to effectively promote the area. With the current
economic crisis, rates have already been cut, budgets slashed, employees
laid off. Occupancy rates are down across the country 30%. To ask motels
and guest houses to sacrifice another 2% off their sales, with no return,
will effectively drive some of these places out of businesses. Gloucester
businesses compete not just with each other, but with Cape Cod, Coastal
Maine and the Jersey shore.

What is the solution?

1. The City is in desperate need of new revenue. The tourism industry is in
desperate need of help to recover from these desperate times. Together a
partnership could be formed to help both.
2. The meals tax will probably bring the City a $375,000 windfall annually,
based on the state estimate of $50,000,000.00 in local restaurant sales. The
majority of these sales are generated in the summer and fall by tourism.
3. The rooms tax may bring in 50% more of what it brings in now or
approximately $125,000.00 annually. Except of course with the decrease in
occupancy and room rates, this could be as low as $100,000, or even less.
4. With the new economy the hotel industry is not employing as many people
and of course all the other businesses including restaurants, shops,
museums, sports fishing boats, whale watching boats and many misc. service
businesses that rely on tourism, are in desperate shape.
5. We suggest that the City devote 1/2 of any increase in the rooms tax to
publicize Gloucester to increase restaurant and room sales, thereby
employing more people, increasing the windfall from these tax increases and
bringing more revenue to all the associated businesses.
A win, win for everyone!


Tracey Muller
Bass Rocks Ocean Inn
107 Atlantic Rd.
Gloucester, MA 01930