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Rate wars, low occupancy send hotel-motel tax revenue down

LAWRENCEVILLE - As people cut down on travel in the spiraling economy, Gwinnett's hotel-motel tax rates plunged in February.

The tax was down 18 percent compared to the year before, Gwinnett Convention and Visitors Bureau Executive Director Caryn McGarity told the bureau's board last week.

"We are feeling it," she said of the economic pressure, although she said she hoped weddings and reunions would help pick up the travel season this summer. "It's tough right now out there."

Marcy Adams, a board member who works at the Atlanta Marriott Gwinnett Place, said business is down more than it was right after the Sept. 11 terrorist attacks in 2001.

Both McGarity and Adams said occupancy is down, but the bigger issue is a rates war, as hotels are competing for the same business.

"It's pretty much a blood bath," Adams said.

In unincorporated Gwinnett, the 7 percent tax is added onto the hotel guests' bills and goes to fund the bureau. Cities can charge their own percentages for hotels within their borders, and some of the proceeds go to promoting tourism.

Because of the economy, officials had projected slower hotel-motel tax revenues, but the board's accountant is monitoring the collections so the board can react quickly to a greater downturn, treasurer Dave Kaplan said.

While the bureau is seeking new kinds of business to book for the year, Gwinnett Center manager Joey Brooks said his staff is concentrating on cutting expenses.

The Arena is still generating major concerts, like the upcoming sold-out Sugarland show, but Brooks said his staff has managed to cut about $50,000 in monthly expenses.

"They have been very creative during this time," Brooks said. "We are shaking the bushes."

Two developments may help with revenues.

Earlier this month, county commissioners approved a change to the hotel-motel tax, based on changes to state law. Now, the county will be able to collect taxes for the first 30 days someone rents a room at an extended-stay motel, as opposed to only collecting the tax in the first seven days in the past.

Last week, the Georgia Supreme Court revived a lawsuit involving the city of Atlanta's convention bureau, which could allow more tax revenue when hotels are booked using online sites such as Travelocity or Orbitz or Expedia.

McGarity said she did not know how much revenue would be generated by either outcome.

Bureau board Chairman Tommy Hughes said he was confident the county's tourism business would survive the downturn.

"We are in uncharted waters with what we are dealing with," Hughes said. "But we're going to get through this."