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Drop in hotel-motel tax revenue in Rockford has significant impacts

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ROCKFORD (WREX) — The City of Rockford had a significant drop in the revenue from the hotel-motel tax. A drop in tax revenue means serious consequences for Rockford.

For hotels and motels, 2020 has been difficult.

"We have had a significant drop in revenue," Janet Eyster, the general manager of the Fairfield Inn and Suites, says.

COVID-19 halted travel and cancelled events.

"We're definitely not where we would've been last year," Eyster explains. "We did see, once things started to lighten up a bit, we did see a little bit of an increase, but now we've dropped back down again so, I would say we're running anywhere from 20 to 40 percent."

The situation with Eyster's hotel is not unique and it can be seen in Rockford's hotel-motel tax revenue returns.

"We are about 41 percent under our expected collections year to date," Carrie Hagerty, Rockford's Finance Director, explains.

That money is used for a variety of things, like tourism and development opportunities. But half of the total revenue from the tax goes toward the operation and expenses of the Rockford Area Convention and Visitors Bureau.

"We have had to make very significant reductions in our marketing programs in the region," John Groh, the CEO of the RACVB, says. "We've had lay-offs and furloughs and pay reductions for employees."

The tax revenue is also used for improvements in city-owned facilities, like the BMO Harris Bank Center and the Coronado Performing Arts Center.

"Without a rebound, or some recovery, in hotel-motel tax revenue, we may have to delay investments in maintaining some of those facilities," Hagerty says.

"This will be a long recovery for the tourism market," Groh adds.

Money from the hotel-motel tax is restricted by the state and can only be used for tourism or development-related purposes.

Richard Bodee

Richard Bodee is a reporter at WREX. He joined the 13 WREX team in June 2019 after graduating from DePaul University with a Master’s degree in broadcast journalism.

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