This week, Azusa locals checked ballot boxes in the March election, one of which was a vote for or against Measure A, which proposes a raise in the transient occupancy room tax rate. The TOT is also known as a “bed tax,” one a person pays when staying at a hotel.
According to Azusa city attorney, the current 7.5 percent bed tax “is imposed upon paying guests of hotels within the city for occupying a room or other hotel space for dwelling, lodging or sleeping purposes for a period of 30 consecutive days or less. … The passage of Measure A would increase the tax rate to 10 percent.”
Compared with other cities, this is a relatively low rate. The city of Anaheim has a 15 percent TOT and receives more frequent visitors, given attractions like Disneyland and California Adventure. Nearby cities, including Duarte, Monrovia and Pomona, all have rates at 10 percent.
“The cities around us all have bed taxes at 10 percent, which is the norm. If our voters approve it, we will see another $47,000 more in revenue,” Azusa Mayor Joe Rocha said.
Rocha also explained that Azusa is building a hotel off Azusa Avenue and has already purchased a vacant lot that used to be an Enterprise. The hotel will be close to the 210 Freeway, just minutes from campus, and offer a place to stay for the families of students and those visiting the university for conferences or sporting events.
“We’re looking forward to opening a beautiful 5-star hotel,” Rocha said. “We lose a lot of revenue by not being able to offer a place to stay for the university students and events nearby like the Rose Bowl and Rose Parade.”
The city attorney expects the tax to raise around $75,000 total for the city annually. This money is part of Azusa’s general tax fund and can be used for a number of areas, including parks and recreation, libraries and police services.
Dr. John Thornton, an accounting professor, explained that the concept behind raising the hotel tax is simply supply and demand.
“There is a little economic concept called supply and demand, and it is affected by another concept called price elasticity — if prices are inelastic, demand stays the same, regardless of price,” Thornton said. “Take gas, for example. The demand stays about the same if prices go up, because we still have to drive to get somewhere.
“As this relates to hotels in Azusa: If the people staying at the hotels are just passers-by, off of the 210, for example, raising the taxes will raise the hotel price, so travelers may drive on to Pasadena or Claremont. Elastic. But if people staying in Azusa hotels have a specific reason to be here, like visiting their APU students, then they may stay here regardless of price. (Prices are inelastic.) In that case, occupancy will stay about constant with the raise and Azusa will get more taxes.”
According to the APU website list of preferred places to stay, none of Azusa’s hotels are suggested to parents or visitors to the university, most likely because the three current inns are only rated as 1-star lodging. Preferred hotels are those that offer discounts if you mention APU.
A junior BFA and acting for the stage and screen major, Maryanne Burr, can attest to this as an out-of-state student.
“My parents have come to Azusa for my theater productions. My mom usually finds the hotels with the best rates that offer rewards systems and Marriotts usually have the best deal, so they’ve ended up staying at the Fairfield Inn and Suites,” Burr said. “I do think it would be more convenient for families [to have a hotel in Azusa]. I don’t feel like I’ve even seen hotels around here, except maybe for one motel.”
The city has already hired a contractor and is in the early stages of developing the hotel.