- The average lodging levy in the U.S. has climbed to over 15% due to increasing city and county bed, occupancy, and tourist taxes.
- A California appeals court ruling upheld a tiered hotel tax increase in San Diego to fund city convention expansion and homelessness programs.
- Major cities like Washington D.C. (15.95%) and New York City ($\approx 14.75\% + \$3.50$ nightly) have some of the highest combined tax rates.
- Consumer behavior is shifting, with evidence suggesting travelers are moving stays to suburbs or alternative accommodations to avoid the rising costs.
I’m just full of bad news today. A rising trend across major U.S. destinations involves cities increasing their hotel taxes, variously termed bed, occupancy, or tourist taxes, which significantly drives up the total cost of an overnight stay. Industry analysis indicates that the national average lodging levy has now risen above 15%.
This momentum for local tax increases has been underscored by a California appeals court ruling in October 2025 that upheld San Diego’s voter-approved Measure C. The measure raises the city’s transient occupancy tax from 10.5% to a tiered rate between 11.75% and 13.75%, with funds specifically earmarked for convention expansion and homelessness programs.
Hotel tax structures vary widely across major U.S. markets. Washington D.C. currently charges a substantial 15.95%, extended through late 2027. New York City’s combined taxes and fixed nightly fees result in charges summarized around 14.75% plus a $3.50 nightly fee. Other cities have recently implemented or proposed increases, such as Oklahoma City, which raised its city levy to 9.25% in late 2024, and Aurora, Illinois, which will double its tax from 3% to 6% in 2026.
While tourism officials argue these taxes fund visitor services without burdening local property owners, the cumulative cost is impacting traveler behavior. Reports suggest that consumers are increasingly shifting their stays to suburban areas or choosing alternative accommodations to manage these climbing expenses, further highlighting concerns about the lack of transparency when these charges appear late in the booking process.
Here are four important topics from the writing: