Hotel execs brace for battle against Measure E | September 7, 2018 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - September 7, 2018

Hotel execs brace for battle against Measure E

Opponents of transient-occupancy-tax hike say they worry the change will hurt local economy

by Gennady Sheyner

Stanford University's graduation season typically brings flush times to the Cardinal Hotel, with guests booking rooms at the downtown Palo Alto hotel months in advance.

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Staff Writer Gennady Sheyner can be emailed at gsheyner@paweekly.com.

Comments

31 people like this
Posted by R. Davis
a resident of Crescent Park
on Sep 7, 2018 at 9:21 am

CA sales tax + hotel tax adds roughly 20% to an average lodging bill. A significant add-on cost for some while no big deal for others (depending on one's pocketbook and individual affordability factors).

Many businesses resent being tax collectors for municipalities because it amounts to little more than additional billing & bookeeping procedures that offer no actual advantages to them over the long run.

If the purpose of increasing PA hotel taxes is purely abstract with no clear-cut objectives in sight, it should be rejected.












7 people like this
Posted by Bill Glazier
a resident of Old Palo Alto
on Sep 7, 2018 at 9:31 am

If hotels are concerned about their occupancy rates, I have a very simple solution - LOWER YOUR RATES. If you think 1.5% additional on a hotel bill will discourage anyone, you are like Chicken Little saying the sky is falling. This weekend, most everyone is fully booked - though the Four Seasons has rooms for $460 and the Clement has a few rooms for $675. You can get a room at the Hilton Garden Inn for a the very low $289. You think $6 more a night will clear out and 'shutter' the Four Seasons? Nope.

The PR mavens and the hotel owners have only two interests - special zoning concessions to keep building more and more in this City, and figuring out ways to hamstring their new competitors - the AirBnB and VRBO's of the world.

The Weekly - since they take so much advertising from these people - is obviously giving them a voice to make them feel good - but we should really disregard their crocodile tears.

We can have a reasonable discussion about the City's Infrastructure Spending and whether it is wise - but that frankly is a completely separate discussion.


20 people like this
Posted by R. Davis
a resident of Crescent Park
on Sep 7, 2018 at 9:54 am

QUOTE: If hotels are concerned about their occupancy rates, I have a very simple solution - LOWER YOUR RATES.

It doesn't work that way. When the lodging demands are up, the motels/hotels charge more & during slow periods, they charge less.

It's essentially 'cashing-in' during opportune timeframes.

In PA & surrounding areas, most of the high lodging demands occur during the midweek to accomodate out-of towners attending business meetings & in-house high-tech conferences. During the weekends, lodging demands are lower & this is reflected in the lower motel/hotel prices.

Reason...PA is not a resort area with typical high/low seasons & weekend tourists.
It is a hub for business interests & high-tech industries.



26 people like this
Posted by Milton R
a resident of Barron Park
on Sep 7, 2018 at 10:00 am

I am all for having a modernized city that spends their coffers deliberately and with the interest of our community at the forefront. But I cannot sympathize with our current city council and their tactics. I was polled and the questions were VERY specific. If they are genuine about sticking to our infrastructure plans, why didn't they make ANY tax increase (hotel, soda, sales, etc) specific for that purpose? We can't continue to let them trick us. Tanaka said it right, fearmongering language won't work this time with me.


8 people like this
Posted by Bill Glazier
a resident of Old Palo Alto
on Sep 7, 2018 at 10:12 am

R Davis - Having lived here in Palo Alto for 30 years and served on the Palo Alto Planning Commission and been involved with many high tech companies, I know very well how the hotel industry in Silicon Valley works. Your comments above just reinforce my point. Hotels do take complete advantage when times are good -they jack up the rates as much as they can. Hotel prices here are insane. The issue is not the hotel tax, or the sales tax, the issue is the core rate these hotels want to charge. You think $460 a night for a weekend is a cheap rate? I don't.

I do not begrudge them making money. I do take issue with the crocodile tears here - "another 1.5% and I think we might just need to close the doors", says the big, bag PR guy. The City needs money to pay for the infrastructure and other costs of the insane growth we have experienced, and that the hotels benefit from. While I am not a fan on unnecessary taxation, I am a fan of honesty - and none of the hotels in this town are hurting right now in any way, and so they should frankly be pretty high up on the list of potential suspects for additional revenue generation.

In some ways, this is an issue barely worth commenting on, it is so obvious and transparent to most people. But in the days of fake news and people trying to take advantage of publishers, newspapers, and online comments, I thought I would jump in and be clear. Not much empathy for the hotel owners who are gouging us at the moment since times are good.

Come back when your occupancy rates are 60% and not 85-90%.


5 people like this
Posted by Sarah
a resident of Crescent Park
on Sep 7, 2018 at 10:24 am

@Bill Glazier - QUOTE "If hotels are concerned about their occupancy rates, I have a very simple solution - LOWER YOUR RATES"

I am not a math wiz, but if the hotels lower their rates to have the same occupancy as last year (even when the city's own stats show a trend of occupancy going down)that will not create any additional tax revenue to the city. Right?


20 people like this
Posted by R. Davis
a resident of Crescent Park
on Sep 7, 2018 at 10:33 am

QUOTE: Hotels do take complete advantage when times are good -they jack up the rates as much as they can. Hotel prices here are insane. The issue is not the hotel tax, or the sales tax, the issue is the core rate these hotels want to charge. You think $460 a night for a weekend is a cheap rate? I don't.

Tending to agree with you Bill as the add-on taxes are reflective of the overall lodging bill.

When ocupancy demands are high, even a stay at a 1-star motel can run close to $300.00 in the midpeninsula. I'm not defending the innkeepers by any means but perhaps they are 'compensating' for the slower periods.

Personally speaking, I do not believe in paying Mark Hopkins prices for Motel 6 accomodations regardless of the season or demand.


30 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Sep 7, 2018 at 10:39 am

Online Name is a registered user.

Just vote no. Palo Alto is clueless about spending our money responsibly.


16 people like this
Posted by Anne
a resident of Midtown
on Sep 7, 2018 at 11:20 am

I am voting No because of the Ross Road debacle.


27 people like this
Posted by Neighbor
a resident of Another Palo Alto neighborhood
on Sep 7, 2018 at 1:19 pm

I am against taxing the hotels more because it's just crack for the pro-overdevelopment City Councilmembers who want to find another reason to think they can care less about residents.

Also this town has a bad history with coming through on promises made for why a tax should be raised - the most recent school district tax in which they went on about class sizes and student mental health in the midst of a suicide crisis was quickly sucked away by raises after recent raises, including "me too" raises to overpaid underperforming administrators. The last school bond that the Superintendent promised would completely rehabilitate all of our school sites somehow became a few fancy buildings that could have been purchased for way less than was raised and a lot of really super expensive superficial hardscape and paint. Try asking about the purpose of the bond and what you hear now will be completely unrecognizable relative to what is promised in writing and especially what the superintendent then said verbally to the public. And now they are going to ask for more. Do not expect any tax that does not have a lockbox specific promise for where the money to go to be spent the way it is promised in the elections, whether it is a local election or elsewhere. This is coming from a liberal voter.

My house is too small so relatives always stay in hotels, so I know very well why vacancies are up in town. The price of hotels has gone through the roof in recent years. Citing averages does not tell the story because the hotels lower the rates on the weekends, but most people who want to visit cannot restrict their stays to just those nights. Any reduction in average occupancy rates is easily explained by a disproportionate reliance on business travelers during the week, loss of leisure visitors including over weekends because prices always go up during the week, and commensurate stratospheric prices that ordinary people can no longer pay. There are no longer any bargains during the week, period. Even the most yucky hotel can charge $300/night during the week. This increase has gone hand in hand with way more hotel spaces added from all the new development, and more will be added soon. This is not a problem with decreasing demand for hotel rooms in the broader area, it is a whole segment of customers being driven elsewhere or away entirely by stratospheric prices during the week here by hotels chasing business customers, and has been driven by opportunism not from the demand for hotel rooms.

I never used to have to try to place relatives in far away hotels, but I have for the last few years. Even using hotel rewards has meant going to Sunnyvale or further. It's gotten to the point where I don't even take looking at local hotels seriously anymore. If you find a good rate for a weekend stay, it inevitably goes up through the roof come Sunday night. The hotels might do themselves some good in the long run by running specials for locals so they don't just write off referring family and friends to those places.

Or they don't think a new hotel tax given how much more hotels are charging is overdue.

This is just the next step after the City Council allowed the stretch of El Camino between San Antonio and Arastradero to become a hotel monoculture. What do they care, it's not their side of town.



4 people like this
Posted by College Terrace
a resident of Evergreen Park
on Sep 7, 2018 at 1:41 pm

College Terrace is a registered user.

Airbnb offers so many opportunities for visitors, including the houses that are kept only for Airbnb as is the house behind mind. Until a month ago, the 4 bedroom home next to me was also being used as a Airbnb rental at $500 a night, with daily maid service. What a bargain for families compared to the cost of 4 rooms at a local hotel. It's not surprising occupancy at local hotels has dropped when families come for Stanford related events.


21 people like this
Posted by Vote NO
a resident of Barron Park
on Sep 7, 2018 at 2:22 pm

...Just vote no. Palo Alto is clueless about spending our money responsibly.

...This is just the next step after the City Council allowed the stretch of El Camino between San Antonio and Arastradero to become a hotel monoculture.

...none of the hotels in this town are hurting right now in any way,

...Also this town has a bad history with coming through on promises made for why a tax should be raised


Need we say more?


13 people like this
Posted by Bill Ross
a resident of College Terrace
on Sep 7, 2018 at 2:22 pm

The USC Stanford game supports the Palo Alto Hotel owners' position. Friends from Southern California limited their selection of a hotel to Mountain View, Menlo Park and Sunnyvale based on the difference in cost associated with the Hotel Tax. So much for conjecture of no impact of the proposed increase by the Council majority.

This coupled with the lack of restriction of the projected tax proceeds for a specific purpose such as affordable housing or relief from traffic congestion (such as funding the eliminated Police Motor cycle Officers at a minimum) merits a "No" vote.


1 person likes this
Posted by Aric Patel
a resident of Barron Park
on Sep 7, 2018 at 2:42 pm

If you don't like the motel prices then go find a room somewhere else.


6 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Sep 7, 2018 at 2:52 pm

Gale Johnson is a registered user.

I'm still undecided on it, but my initial inclination is to vote against it. I know, and I've read all the comments of how motels/hotels gouge people during the good times...almost 100% occupancy times...with high rates. I have no skin in the game because I own my home, but all the clamoring CC is doing to extract money from out of town visitors, to pay for bad projects and retirement benefits, just isn't right.

If they think we are such a great community to live in, then they should accept the fact that it takes the residents of this great community, to pay the bills.


12 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Sep 7, 2018 at 4:36 pm

Online Name is a registered user.

I was at the CC meeting where the hotel reps all expressed their shock that they had to learn about the proposed tax increase from the media, how "disappointed" they were to not have gotten any type of courtesy or fact-finding call from the city. They were unanimous in opposing the increased tax.

Evidently you don't have to be a resident or a neighborhood to suffer PA's failed outreach.


Like this comment
Posted by I'll be voting Yes on Measure E
a resident of Duveneck/St. Francis
on Sep 7, 2018 at 4:46 pm

I'll be voting Yes on Measure E is a registered user.

This article reads like an editorial, not news reporting. I'm inclined to agree with Mr. Glazier. I read the Infrastructure Budget. While I would have preferred clearer ballot language, this money is earmarked to fund critical infrastructure projects we have needed for a long time. We need to get these projects funded and moving. The difference in added cost to a hotel room is less than a cup of cheap coffee. Let's get this done.


6 people like this
Posted by Long Time Resident
a resident of Old Palo Alto
on Sep 7, 2018 at 4:52 pm

The hotel rates are already too high here, and in the surrounding cities up and down the peninsula.
The larger companies might start offering rooms for their visitors.
It would be both cost saving and convenient.
Many already provide food service.

Regular visitors to our area (friends, family, tourists (I see fewer and fewer each year) have no other option but to stay with their friends, or look for a short term rental on the internet.




2 people like this
Posted by Random
a resident of Downtown North
on Sep 7, 2018 at 5:00 pm

Will the $2.5M raised really make a dent in any of the infrastructure projects? I think even hotels know that funding these items are necessary. I suppose the point is what happens when the economy turns. You won’t get nearly the revenue you thought and will be left with higher occupancy tax with no provision to sunset the increase.

Why haven’t cities adopted dynamic taxation. Hire experts in lodging telling you where occupancy and rate trends are headed. Increase in the good times. Decrease as they see slowing.

People who want to be in Palo Alto will stay in Palo Alto, but in the aggregate, this has the potential to move rooms nights to neighboring cities. So far the discussion here for pro-Meausre E has focused on greedy hoteliers. Other cities’ hotels charge the same exorbitant rates.


16 people like this
Posted by Yeah Right
a resident of Embarcadero Oaks/Leland
on Sep 7, 2018 at 6:02 pm

>>this money is earmarked to fund critical infrastructure projects we have needed for a long time. We need to get these projects funded and moving. The difference in added cost to a hotel room is less than a cup of cheap coffee. Let's get this done.

Define specific infrastructure projects & where you buy your coffee. Inquiring minds want to know.


10 people like this
Posted by Random
a resident of Downtown North
on Sep 7, 2018 at 6:27 pm

Sadly, even in an educated community such as ours the power of messaging will rule the day. Framing issues is all that matters to a largely apathetic public. Even highly educated folks will get distracted into thinking this is about greedy hoteliers versus raising revenue for the city. The success of one is necessary to achieve the other. There are smarter ways to raise money but the residents, perhaps rightfully, don’t have any incentive to raise taxes on themselves to fund these infrastructure projects. Anyways, if anyone thinks this new revenue is going towards infrastructure, you’ve already been fooled. Think pensions and city staff salaries. The city has a major shortage of staff.


27 people like this
Posted by R. Davis
a resident of Crescent Park
on Sep 7, 2018 at 6:39 pm

QUOTE: Anyways, if anyone thinks this new revenue is going towards infrastructure, you’ve already been fooled. Think pensions and city staff salaries.

A good enough reason for a NO vote.


16 people like this
Posted by Yeah Right
a resident of Embarcadero Oaks/Leland
on Sep 7, 2018 at 6:45 pm

> this money is earmarked to fund critical infrastructure projects we have needed for a long time. We need to get these projects funded and moving.

>> if anyone thinks this new revenue is going towards infrastructure, you’ve already been fooled. Think pensions and city staff salaries.


Infrastructure = pensions & city staff salaries? Most are already overpaid.

A good enough reason for another 'no' vote.


2 people like this
Posted by I'll be voting Yes on Measure E
a resident of Duveneck/St. Francis
on Sep 7, 2018 at 8:57 pm

I'll be voting Yes on Measure E is a registered user.

Of course, the slight reduction in occupancy rates has nothing whatsoever to do with high base room rates, a significant increase in the number of new hotel rooms in Palo Alto, and the increase in alternatives like AirBnB.

Incentive to stay in Palo Alto hotels when doing business in Palo Alto is high. Have you driven on the Peninsula? Time is money. Commute time of highly paid people has a price tag.


Like this comment
Posted by Anon
a resident of Ventura
on Sep 7, 2018 at 9:52 pm

The planning commission just reviewed a proposal for a new five (5) story hotel in South PA. Clearly there is enough demand that developers see it as profitable to build new hotels in the city. I'm generally not for more taxes, but for our city with grossly under-funded infrastructure, this seems like a reasonable proposal.


10 people like this
Posted by Annette
a resident of College Terrace
on Sep 8, 2018 at 7:17 am

How a ballot measure is written is not accidental. Deliberately confusing language is often used to yield a certain vote. And vagueness is used to allow after-the-fact latitude that voters may not have intended to grant. Absent clear restrictions that the revenue from this tax can be spent ONLY on specific infrastructure projects leaves open the opportunity to use the funds for other purposes. Classic bait and switch. Proponents of this tax can obviously say whatever they want, but in the realm of politics and government, what good is a promise, really?


11 people like this
Posted by Abitarian
a resident of Downtown North
on Sep 8, 2018 at 7:55 am

I have supported previous increases in the hotel tax, but I am almost certainly going to vote against this measure.

No, I don't have any sympathy for the hotel owners. I am simply disgusted by the city's intentional crafting of the ballot language to create a false and frightful message; that is, a lie.

In addition to years of financial and policy mismanagement and lack of concern for resident quality of life, we have witnessed many incidents suggesting nothing short of a complete breakdown in ethics at City Hall.

I won't endorse this behavior and encourage citizens to take every step necessary to restore integrity.


10 people like this
Posted by Yeah Right
a resident of Embarcadero Oaks/Leland
on Sep 8, 2018 at 9:18 am

> If you don't like the motel prices then go find a room somewhere else.

A typical motel/hotel operator view? Probably so.


>> No, I don't have any sympathy for the hotel owners.

A reasonable sentiment given the opening statement?


>>> I am simply disgusted by the city's intentional crafting of the ballot language to create a false and frightful message; that is, a lie.
>>> Deliberately confusing language is often used to yield a certain vote.
>>> if anyone thinks this new revenue is going towards infrastructure, you’ve already been fooled. Think pensions and city staff salaries.

I would imagine that most here get the real picture (with the possible exception of those proponents in favor of validating questionable 'infrastructure' expenditures).






12 people like this
Posted by R.Davis
a resident of Crescent Park
on Sep 8, 2018 at 9:51 am

R.Davis is a registered user.

Moral of the story...if you are going to vote, strive to be an enlightened voter.
We've seen what eventually happens when people aren't.


12 people like this
Posted by Go Trojans
a resident of another community
on Sep 8, 2018 at 3:07 pm

[Post removed.]


Like this comment
Posted by Trolls
a resident of Crescent Park
on Sep 8, 2018 at 4:15 pm

[Post removed due to deletion of referenced comment.]


12 people like this
Posted by Neighbor
a resident of Another Palo Alto neighborhood
on Sep 8, 2018 at 5:20 pm

[Portion removed.]

If you know the local market, you know that prices dip dramatically during the weekend then any weekday they are higher because of business travelers. If you use Trivago to do a really thorough search for hotel rooms in Palo Alto, and pick a little ways from now in order to eliminate any short-term distortions -- and October isn't exactly peak tourist or Stanford time, say Monday Oct 1 to Friday Oct 5, even Travelodge and Comfort Inn are more than $250/night, and the quote from Hilton Garden Inn is $554/night for a double queen room. October 15-19 is little different.

Usually you can find a Saturday night stay for less - checking Friday to Saturday Oct 19-20, Hilton Garden Inn drops to 139 and you can even get a room at Creekside for $99, but it's dishonest to list rates by the Fri/Sat rates because anyone who rents rooms around here knows they go through the roof during the weekdays including Sunday night because of business travel. It has been extremely difficult to have relatives visit in recent years, I know the prices, my ability to see my family depends on it.


11 people like this
Posted by It's Not Unusual
a resident of Menlo Park
on Sep 8, 2018 at 5:58 pm

[Post removed.]


11 people like this
Posted by Neighbor
a resident of Another Palo Alto neighborhood
on Sep 8, 2018 at 6:52 pm

[Portion removed.]

A friend from the east coast called late one night asking if it was possible to sleep in my driveway in the friend's rental car, because the only hotel that fit in the per diem that night seemed downright unsafe (drug dealing, prostitution, etc -- San Jose, not Palo Alto, but there were no rooms even close to that price in Palo Alto either). I cleared a space on the floor of a room, diagonally was the only way to fit, and the friend was absurdly grateful.

During the week, the cost of hotels in Palo Alto is astronomic even the really not good ones. It makes it impossible to bring family out anymore.

I am still going to vote against the tax because I think it will only encourage this overdevelopment majority on the city council to approve more resident-damaging projects like more hotels when that's almost all there is between San Antonio and Arastradero on El Camino already. And we already know that if a tax proposal doesn't have a really enforceable specific purpose, the money will go to something else like the recent school district tax in which we were practically beaten over the head with the dire needs for students and then the money went to raises when the staff had already just gotten good raises.


3 people like this
Posted by EPA water rights
a resident of Duveneck/St. Francis
on Sep 8, 2018 at 9:56 pm

[Post removed due to inaccurate information.]


2 people like this
Posted by Deepak
a resident of Barron Park
on Sep 9, 2018 at 3:45 pm

>>>>> Hotel execs brace for battle against Measure E

No big deal. We will just add any tax increases to the overall bill.

It's not coming out of my pocket so I really don't care.

One pays to stay in Palo Alto. It comes with the territory.


Sorry, but further commenting on this topic has been closed.

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