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New hotel association leader worries most about D.C. taxes

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By Danielle Douglas
Monday, December 20, 2010

Having served as vice president of the Hotel Association of Washington, D.C. for past three years, Solomon Keene had a firm handle on the matters at hand when he accepted the position of president earlier this month.

While the association's 94 hotel members are enjoying the industry-wide rebound in occupancy and room rate revenue, they confront some uncertainty ahead. Labor negotiations are still up in the air. And there is some ambiguity as to what the change in the city's administration will mean for the hotel industry. Keene, who replaced longtime leader Emily Durso, spoke to Capital Business about the state of the industry.

What do you consider the most pressing issues facing the local hotel industry?

Taxes are always an issue of concern. We're the largest private industry in Washington, D.C. Our relationship with the District government is strong. They understand our presence here. So we want to make sure that we remain competitive with other cities that are in the same convention and hotel market. We want to make sure we don't tax ourselves out of that competitive set.

Are you getting a sense that there are plans to raise the hotel tax?

No. We're constantly communicating with our members to get their feedback and sense on hotel taxes. And we work very closely with Destination D.C. to get a sense of where other cities are in the country that we compete against. We want to make sure the hotel tax in D.C. is not prohibitive to meeting planners.

Raising taxes isn't the only way to generate revenue for Destination D.C. And these are conversations that we will have with our members and Destination D.C. moving forward. But as of now, I think it's prudent to see what happens with the city budget before engaging in any serious conversation about the tax.

When Mayor-elect Vincent C. Gray (D) was on the campaign trail, he called for the creation of a public-private investment fund so all of the burden wouldn't be on hotel taxes to support tourism marketing. Have you heard anything more about that idea?

Like you, I heard that on the campaign trail as well. And we work very closely with the Washington Sports Authority and Destination D.C. to ensure Destination D.C. has the resources that it needs to be successful. But we haven't had those discussions with the mayor-elect because we understand the challenges of the $400 million budget shortfall. We certainly want to be sensitive to that and make sure the timing is appropriate before we have any discussions.

Are there any local government policies that are of concern?

We have online vendor tax legislation pending in the District Council, which is critically important. Third-party intermediaries, such as Priceline.com or Expedia.com, are collecting the 14.5 percent sales tax, but only remitting a portion to the District. So we want to make sure, particularly with the projected budget deficit, that the District is in a position to collect money that is rightfully owed. And that could mean additional dollars for the Washington Convention and Sports Authority.

What's the status of your negotiations with the hotel union Local 25? Any meetings scheduled?

No, but I'm confident that we will meet. All of our hotel general managers want to reach a deal that is in the best interest of the hotel and their associates. We continue to bargain in good faith and look forward to reaching a deal.


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