From Route 66 nostalgia and Abraham Lincoln sites to a vibrant dining scene and a new sports park that is poised to make our city a regional destination, Springfield has a lot to offer visitors. Yet, what should be our crown jewel – our beautiful and historic downtown – has become stagnant in recent years as businesses struggle to bounce back from the pandemic slump made worse by persistent inflation and lagging consumer confidence.
Springfield and Sangamon County leaders think they’ve identified an answer to this problem in the form of a proposed development that would add a 40,000-square-foot event space to the BOS Center – expanding but not doubling the contiguous convention space – and bring a 300-room hotel downtown to accommodate the hoped-for increase in convention goers (“A plan to save downtown,” June 5). We appreciate the big-picture thinking, as projects like this have the potential to cause a positive ripple effect that can grow local businesses, increase jobs and strengthen our economy.
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However, we are deeply concerned with the proposed funding mechanisms for this project, specifically a new 3% hotel tax under consideration by Sangamon County officials. The authorization for this tax hike was snuck into a larger tax package passed by state lawmakers in the closing hours of the 2024 legislative session. If approved, this increase would bring Springfield’s total hotel tax to 17% – the second highest in the state behind Chicago, which taxes hotels at 17.39%.
At the risk of stating the obvious: Springfield’s hospitality market is very different from Chicago’s. We have a smaller population, a significantly lower cost of living and limited air travel options that make it difficult for most business travelers to get here. Unlike Chicago, our hotel demand is driven primarily by state government and a handful of major employers, not by large-scale conventions. It’s simply unrealistic to expect Springfield’s hotel market to absorb a tax rate built for a fundamentally different kind of city.
A 17% hotel tax would also put Springfield at a competitive disadvantage among regional competitors, as Peoria, Bloomington-Normal, Rockford and the Quad Cities would be able to boast lower costs to interested clients. That will be detrimental to Springfield’s effort to attract more conventions, meetings and sporting events, as organizers will simply choose to hold events in communities that are more affordable. In many ways, adopting a higher hotel tax is positioning the new sports park and potential convention center expansion to fail from the outset.
To make matters worse, the county’s own feasibility study found that increasing the hotel tax will not generate enough revenue to cover the cost of the convention center expansion. Other revenue sources will be needed to properly fund the project.
As it is, Springfield’s daily hotel occupancy rate, the percentage of available rooms occupied by guests, sits at just 53%. That means hotels throughout Springfield are already struggling to fill even half of their rooms. Making hotel stays more expensive by raising taxes won’t reverse that trend.
So why risk damaging Springfield’s hotel industry with an ineffective tax hike that would drive away the very visitors we have invested so much taxpayer money into attracting? It’s time for a different approach.
Hotel operators support efforts to increase tourism in Springfield. That’s why we supported a hotel tax increase in 2021 to help finance the new sports park. But it must be done in a smart and sustainable manner that advances our shared goals instead of diminishing the progress we’ve already made.
Keenan Irish is vice president of government relations and member engagement
for the Illinois Hotel & Lodging Association and Darin Dame is an IHLA board member and president of the Springfield Hotel & Lodging Association.
This article appears in Getting right with Native Americans.
