The Ocean City Mayor and Council could soon deliberate on whether to support a room tax increase, which would then need to go through the Worcester County Commissioners and the Maryland General Assembly. This year is not the time for this consideration.
There is too much instability within the economy and unknowns associated with visitor travel to consider an adjustment to the room tax for this season.
Two years ago, the room tax was increased from 4.5% to 5% and the hike was justified and understandable. It had been 12 years since the previous increase, and the new revenue raised from the adjustment was to be put toward increased public works and law enforcement costs associated with additional special events and shoulder season growth.
Our objection to the potential hike is not because of the 2019 increase. While the Worcester County room tax remains below other travel destinations near and far, it’s an unnecessary decision to make in what will be a challenging and unstable 2021.
Normal will not return in 2021. Revised timelines for Maryland, and most states similarly, indicate it will be September until 60% of the general population has been vaccinated against COVID-19. We realistically do not expect restaurant capacity and crowding restrictions to be lifted until 2022 when vaccination numbers hit far greater levels than officials estimate will take place this calendar year.
Timing is a critical component when it comes to making decisions, especially one with so many layers as room tax. We do not believe the time is right to increase the room tax and bring in additional revenues for the county and city.
Additional timing issues arise with the Maryland General Assembly convening next week. Enabling legislation such as a room tax increase is traditionally already drafted and pre-filed as a local courtesy bill. Furthermore, we believe it’s too late for local hoteliers and rental companies to adjust their rate literature for the season. It’s not as cumbersome as it once was since electronic booking skyrockets in popularity each year. Nonetheless, it’s late in the game to institute this rate increase in our opinion.
In general, we also think it sends the wrong message to a weary vacationing market to add to the expense of traveling. Increasing taxes in a pandemic rightly will draw ire.
It makes sense for the room tax increase talks to take place in earnest after this season.