Recently Rehoboth Beach, resulting from a city charter change approved by the Delaware General Assembly, will now initiate a hotel/lodging tax of 3 percent. City officials estimate that this tax will generate approximately $900,000 on an annual basis.
Lewes, through our city council, could and should request a similar charter change. Once Lewes requests a charter change, based on the Rehoboth Beach timeline, approval from the General Assembly will take approximately one year.
Here are my estimates and assumptions for Lewes:
• Five hotels/motels: Beacon Motel, Hotel Blue, Dogfish Inn, Hotel Rodney, Inn at Canal Square
• Total number of rooms/suites: 146
• Assume average room rate of $137/night
• Assume average occupancy of 25 percent and 50 percent
25% 50%
• Revenue/night $5001 $10,001
• Revenue/week 35,004 70,007
• Annual revenue 1,820,182 3,640,364
• 3 percent tax 54,605 109,211
Additional annual revenue of $54,605 at 25 percent occupancy and $109,211 with 50 percent occupancy.
Couple the new 3 percent tax with a more robust/strengthened system that effectively/efficiently collects revenue from all Airbnb and other rentals. This would result in significant revenue from those tourists and vacationers visiting our beautiful area and help, in part, to keep a cap on Lewes resident taxes.
I encourage all of us to contact our city council members and mayor to gain local council approval so the General Assembly can take positive action on our behalf.
Paul Griffith
Lewes
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