Napa Valley financial stability tied to Transient Occupancy Taxes (TOT)

Napa Valley hotel business stays strong

Visitors who stay overnight in Napa Valley pay a 12-14 tax on their hotel bill. This TOT tax is unique for it goes right into these city’s coffers. Unlike property and sales taxes which go to the State of California who takes a big chunk and then returns the pittances to the respective jurisdictions. If it wasn’t for these monies, many of the cities in the Napa Valley would be in more dire straits than they currently are.

In case you are wondering, The average daily room rate for a Napa County hotel was up 5.1 % $232.69 and average occupancy was up 6.9 % to 64.2 % for the 12 months ending in May. The Town of Yountville who has the highest occupancy rate in the Valley was 71.6 % for 2011-12.

Transient Occupancy Tax (TOT) income for the Napa Valley cities (all in $ millions except Amer Cyn)

	Napa Co	Napa	Calistoga	St Helena	Amer Cyn	Yountville
2010-11	8.3	9.87	3.43	1.44	$663,427	4.01
2009-10	7.56	8.26	3.04	1.19	$557,365	3.35
2008-09	8.45	8.24	3.21	1.31	$459,590	3.15
2007-08	9.68	8.73	3.4	1.54	$462,381	3.38
2006-07	8.08	7.78	2.52	1.49	$282,656	3.22

Source: Individual city records

The City of Napa’s rate is 14% with 12% going to the city and the other 2 % to the Tourism Improvement District, Visit Napa Valley, which promotes the Napa Valley. This bed tax represents the third-largest source of income for the city, following property and sales tax, according to the city. Last year, it counted for 13 percent of the city’s revenue. The City has by far the largest number of approved new hotel projects including a 351 room Ritz Carlton which could break ground soon. Also in the development stage is the St. Regis at Stanley Ranch with 245 rooms, plus another 510 rooms in initial talks with the City or approved in the General Plan.

Villagio Inn & Spa, Yountville, Napa Valley

For Yountville, visitors and their pocketbooks are even more important. The town is more dependent on the transient occupancy tax than any other municipality in California. At 61 % of revenues, this tax is the town’s largest general fund source. Yountville voters increased the rate from 10 to 12 % in 2005 to help pay for a new community center.

In 2010-’11, the hotel tax surpassed $4 million for the first time, according to a town staff report. This year, the town expects $4.65 million.

About two years ago, St. Helena lifted a long-time cap on new hotels to allow two new, high-end establishments that could soon add to the city’s tax base. In March, the St. Helena City Council legalized short-term vacation rentals, which means more visitor tax for the city.

Bouchon Entrance, Yountville, Napa Valley

Calistoga has three major hotel projects in the works, two for new destination hotels and one to demolish and replace an existing inn with a larger high-end resort. The new destination hotels are hitting a great deal of governmental and citizen opposition and their approval is not certain at this time. Calistoga has been bringing in more than $3 million in recent years, accounting for 49 percent of its revenue. It is easy to see how important this TOT money is to all living here.

Therefore, on the days I think there goes another gosh darn idiot tourist, I only need to remember who really pays for things here. And this is to say nothing about the sales taxes they contributed and all the salaries they support. Nevertheless, it is nearly impossible for me to get my favorite seat at the bar at Bouchon,. Oh well, it all for a good cause, cheers cvc