Discover Lancaster Seeks to Boost Tourism Growth through Rise in Excise Tax Paid by Visitors

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Discover Lancaster is asking the Lancaster County Commissioners to replenish funding for tourism marketing by increasing the lodging excise tax paid by visitors from 1.1% to 3% – a move that would generate an additional $3-3.5 million annually. The tax is paid by guests at county lodging properties – not county residents or businesses.

This is a tremendous opportunity to strengthen and expand one of Lancaster most important industries. Increased tourism marketing funding will support thousands of businesses and jobs within the county. It will help us competitively promote both our traditional Amish farmland & family attractions and our newer arts, dining, and outdoor offerings that appeal to a broader audience.

Discover Lancaster’s total budget has fallen from $4.9 million in 2007 to $3.2 million in 2016, with the elimination of state funding and the current reallocation of its portion of the hotel room rental tax. Increasing the excise tax for the first time in 17 years will begin to provide a more competitive level of funding again for the organization after a decade of financial cuts.

With replenished funding, we will be able to resume television advertising in New York and Philadelphia, and potentially enter new markets like Baltimore. We will also strengthen our group sales efforts and significantly increase our online content & presence.

Over the next five years, the funds are projected to generate 1.2 million additional visitors, $367 million in additional spending, 438,000 additional lodging room nights, and a yearly average of 550 new jobs.

The request by the organization’s Board of Directors to increase the excise tax to 3% comes after several years of study by Discover Lancaster, including research among its members, consideration of different funding options, and analysis of how its competitors fund tourism.

York, Chester and 28 other Pennsylvania counties have recently increased their lodging excise tax to support tourism marketing, and Discover Lancaster already compares poorly with regional competitors in media spending and public funding, leading to current erosion in visitor demand.

Lodging excise taxes are the proven, common, and expected way to fund tourism marketing. Lancaster’s average hotel rate has risen 26% since 2011 – second most among its competitors – yet its price is still at the lower end of the scale, so rates have room to grow while remaining very competitive. The proposal would add approximately $2 to the average overnight stay.