While the number of visitors to D.C. was better than expected in 2021, city tourism officials say they’re still lagging behind pre-pandemic years and that visitors are generally spending less than they used to.

Tyrone Turner / DCist/WAMU

Hotel rooms may soon get a little more expensive in D.C., but city officials say it’s for a good reason.

On Tuesday the D.C. Council approved a four-year increase of the city’s hotel tax — from the current 14.95% to 15.95% — to help cover the costs of new marketing campaigns to encourage domestic and international visitors to return to D.C.

The increase comes at the behest of the city’s tourism board, Destination DC, whose leaders recently told city officials that the COVID-19 pandemic cut in half the number of visitors to the city, the amount of money they pump into the city’s economy, and the number of jobs linked to tourism. And while pandemic-era restrictions have lifted, hotel occupancy for the summer months was still 10% below the same period in 2019, according to data from the agency.

“As we’re looking at recovering as an industry, we are still focusing on how do we regain market share as we still deal with COVID and other variables. And we’re in the same position as basically every major city in the U.S. and globally. So these additional dollars give us the opportunity to really be more aggressive in our marketing and give us a chance to to really do more internationally and domestically in terms of promoting D.C. as a destination,” Elliott Ferguson, the president of Destination D.C., said in an interview with DCist/WAMU.

While many experts say that tourism in many cities across the U.S. isn’t expected to rebound for a few years, Ferguson says that some locations (like Florida and the country’s national parks) saw record tourist visits in 2021. Additionally, while D.C. did see a better-than-expected year for tourism in 2021, data from Destination D.C. shows that visitors are spending less than they did before, and less than what they spend in cities like New York, Chicago, Philadelphia, and Boston.

Even more critically, though, Ferguson says that many cities and states already had larger tourism marketing budgets than D.C. — and have already ramped up spending to woo back tourists.

“A lot of cities have already put in place what’s called tourism improvement districts, whereas similar to what we’re doing, they’ve put in assessments in place, a percentage increase to the hotel tax or individual assessment, that really gives them the additional financial wherewithal to be more aggressive,” he said. He points to Orlando, which he says has a tourism marketing budget of more than $90 million, and Boston, which has doubled its marketing budget since the pandemic began, along with similar moves in California.

Destination D.C.’s annual marketing budget hovers around $25 million. San Francisco, by comparison, spends $32 million, Boston and Philadelphia $33 million a piece, Miami $41 million, and San Diego $56 million. Those cities can also piggyback on state-level tourism marketing campaigns, which D.C. doesn’t have. The increased hotel tax in D.C. is expected to bring in an additional $21 million a year, almost doubling the city’s tourism marketing budget.

The push to increase domestic and international tourism — international visitors make up a small proportion of the total, but spend much more money — comes as D.C. officials push to restore traditional streams of revenue, but also as the city struggles to revive one of its traditional economic drivers: office workers. While some have returned to work in person, many have stayed home or only come into the city a few days a week. Recognizing this reality, city officials have pushed to revive downtown D.C. by encouraging office-to-residential conversions but also by reviving tourism to help offset some of the economic losses from the change in work patterns.

Destination DC recently organized a trade mission to the London to promote D.C. tourism — visitors from the U.K. make up the second highest number of overseas visitors to the District, and tourism officials want more of them to come back.

“The reality you have to spend more to make more,” said Ferguson, pointing to data that shows that every dollar spent marketing the city can result in $3 coming back in revenue. “And we want to tax the industry itself. And therefore, the taxpayers or people that physically live in Washington benefit from the hundreds of millions of dollars generated every single year by those visitors coming to our city. And that’s the bottom line.”