The San Mateo County Board of Supervisors has agreed to pay the city of Half Moon Bay for three years’ worth of projected transient occupancy tax revenue that might have come through the Coastside Inn if the county had not purchased it for a homeless shelter in December 2020.

The board is basing its analysis on future revenues, when the economic outlook on tourism is not certain as pandemic restrictions lift. Over the next three years, the county will pay the city $277,676, the Coastside Inn’s projected transient occupancy tax revenue. It is not based on previous, pre-pandemic years, which city leaders would prefer. As a result, the city is requesting the county revisit the calculations.

HdL Companies, the third-party vendor the city uses to collect its transient occupancy tax revenue, reported data on the Coastside Inn’s transient occupancy tax only going back to 2018, while the records of the Pacific Inn and TownePlace Suites Hotel — other Peninsula hotels purchased for homeless shelters — go back to 2011.

In 2018 and 2019, the Coastside Inn provided $192,657 and $155,421, respectively, in transient occupancy tax. By comparison, the Pacific Inn and TownePlace Suites Hotel paid $336,602 and $675,937 in transient occupancy tax in 2019, respectively.

Not surprisingly, the pandemic caused a huge downturn for the three hotel properties. The company estimated that transient occupancy tax revenue from the three hotels declined 61 percent in 2020 and that it could take between four to five years to recover to 2019 levels, assuming vaccines are widely available and travel restrictions are lifted. This year, the tax revenues are forecasted to be around 40 percent of pre-pandemic levels. This is partly because, while leisurely travel is expected to rebound, business travel is expected to recover at a much slower pace.

August Howell is a staff writer for the Review covering city government and public safety. Previously, he was the Review’s community, arts and sports reporter. He studied journalism at the University of Oregon.

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