Portland City Council creates economic recovery surcharge on overnight stays to help bring back visitors, jobs and spending

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Tourism leaders requested the additional 1 percent fee as part of Portland’s Tourism Improvement District. Their industry has been hit hard by the COVID-19 pandemic and economic recession.

Starting July 1, overnight stays at Portland hotels and vacation rentals will generate an extra 1 percent fee to help bring back visitors, jobs and spending at local businesses.

The Portland City Council voted unanimously to create an economic recovery surcharge as part of the city’s Tourism Improvement District, bringing the total fee on overnight stays to 3 percent to market Portland to potential visitors. Tourism leaders proposed the surcharge – scheduled for a sunset review in 2026 – to help their industry recover from the COVID-19 pandemic and resulting economic recession.

“This is an innovative strategy to help a deeply wounded industry recover,” Commissioner Mingus Mapps, the liaison to Travel Portland, said at a March 10 Council meeting.

Mapps outlined an agreement for travel leaders to return to City Council in six months with an update on economic recovery and the new surcharge. He requested information about a range of topics, including outreach to diverse tourists and convention organizers, support for hotels outside the downtown core and the racial diversity of people hired by the tourism industry.

Colleagues said they support Mapps’ approach, in part to address concerns raised by some small hotels outside the central city. City Council members committed to ensuring that the travel industry advances equity by providing economic opportunity for Black people, Indigenous people and people of color.

The Tourism Improvement District was created at the request of the tourism industry in 2012, imposing a 2 percent fee on overnight stays. Hotel owners typically pass along the fee to guests, and Travel Portland invests the money to promote Portland as a destination.

City officials and tourism leaders both praise the partnership as a success. In 2019, tourism supported 37,000 local jobs in the industry and generated $5.6 billion in spending at local businesses.

“It’s hard to believe it was just a little over a year ago when the travel and tourism industry in Portland was on fire,” Mayor Ted Wheeler said. “We were trending in the right direction, things were thriving, it was becoming a more significant component of our local economy. Of course, all of that hit the skids once COVID reared itself. So here we are planning for the recovery phase.”

Wheeler thanked the tourism community for their proactive approach to bringing back visitors.

“It’s a rare day that the City Council votes on a tax or fee increase that’s proposed by the industry that would actually pay that fee or tax,” he said.

City Council members said they expect Portland’s tourism industry to recover – but not overnight. They urged tourism leaders to look to the City as a partner in rebuilding Portland's economy.

“We’re all rooting for you,” Commissioner Dan Ryan said. “It seems like you’re being as creative as possible to sustain your industry and get some of your employees back to work.”