Staying in Ocean City hotels could soon become more expensive
Sara SwannVisitors to Ocean City may see a slight increase to their hotel bills this summer.
The Ocean City Town Council is considering a small increase to the town’s hotel room tax, bumping it up from 4.5 percent to 5 percent. The mayor and council plan to discuss this change during Tuesday’s work session.
While a decision has not yet been made, the town council seems to be largely in favor of increasing the room tax because this small uptick could yield roughly $1.4 million in revenue and help cover larger expenses. It is unclear whether the tax increase would be put into effect on July 1 or at the beginning of 2020.
"The reason for this discussion is because expenditures have gone up because the tourism season is expanding to be more year-round and we’re seeing an increased number of visitors, so we’re looking for ways to cover that cost," Ocean City Mayor Rick Meehan said.
Why Ocean City is considering a higher room tax
Recent discussions about the room tax change began at the last tourism commission meeting in early January.
Members of the commission approved the 0.5 percent increase 7 to 1, with Ocean City hotelier Michael James opposed. The topic was then passed along to the Ocean City Town Council for further discussion.
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The increase is expected to yield about $1.37 million in additional revenue each fiscal year for the resort town. If Ocean City officials were to implement the change in January, the extra revenue generated for the next fiscal year would only be about $500,000.
It's likely the room tax change would not occur until next year since many hotel rooms for summer 2019 have already been booked, officials said.
Regardless of when the tax bump may happen, Ocean City officials say this additional revenue is needed to help pay for town services that have become more expensive over the years.
Plus, with the tourism season in Ocean City extending to become almost year-round, town officials are looking for ways to cover everyday services, as well as special events.
If passed, the added room tax revenue would be earmarked for funding essential services in Ocean City, such as public safety, public works, solid waste, recreation and special events. It would also help fund tourism advertising and marketing efforts for the beach town.
"This is not a significant cost increase to vacationers," Meehan said. "But it will help us to continue to provide a clean, safe environment by allowing us to cover the cost of providing police, lifeguards and other essential services."
How does Ocean City's room tax rate compare to nearby counties?
Compared to nearby tourist destinations, Ocean City's hotel room tax is relatively low. Even if the town were to increase to 5 percent, it would still rank toward the lower end.
Here is how Ocean City's room tax rate compares to other counties in the area:
- Dorchester County, Maryland — 5 percent
- Somerset County, Maryland — 5 percent
- Wicomico County, Maryland — 6 percent
- Sussex County, Delaware — 8 percent
- Accomack County, Virginia — 5 percent (except in the Town of Chincoteague, the rate is 2 percent)
In other parts of Worcester County, the room tax rate is set at 4.5 percent. So if visitors stay at a hotel outside of the town limits — even in nearby West Ocean City — that room tax revenue would go to Worcester County and not the Town of Ocean City.
In the past, Meehan said he has requested financial assistance from the Worcester County Commission to help offset the lost revenue from visitors coming to Ocean City, but staying outside of the town limits. But his request was denied.
"Vacationers don't know the difference between Ocean City and West Ocean City, but we hope to get some help to attract additional visitors," Meehan said, adding that he plans to reach out to the county again for help with this issue.
If you go
What: Ocean City Town Council work session
When: Tuesday, Jan. 29, 2019 at 1 p.m.
Where: Ocean City Town Hall, located at 301 N. Baltimore Ave. in Ocean City
For more information about the meeting, visit http://oceancitymd.iqm2.com/Citizens/Detail_Meeting.aspx?ID=5445.
Contact reporter Sara Swann at (302) 324-7711, sswann@delmarvanow.com or on Twitter @saramswann.
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