Despite opposition from some aldermen, Aurora will be increasing its hotel room tax rate for the first time in nearly 40 years.
The Hotel Occupancy Tax rate has been set at 3% since it was first adopted in 1987, but city officials recently proposed doubling it to be more in-line with nearby communities. The newly-set 6% rate will go into effect on Jan. 1, 2026, and is expected to bring in an additional $1.1 million for the city each year.
That number takes into account not only the increased tax on 635 currently-open hotel rooms within city limits but also the opening of the new 220-room hotel at the Hollywood Casino-Aurora resort planned for the first half of next year.
The tax increase was approved by the Aurora City Council at its meeting Tuesday in a 9-3 vote. Opposed were Ald. Juany Garza, 2nd Ward; Ald. Ted Mesiacos, 3rd Ward; and Ald. Shweta Baid, 10th Ward.
City officials previously said that increasing this particular tax had a number of benefits: for example, it is mainly paid by people who are not residents of Aurora.
However, Mesiacos said that, while maybe he was looking at the situation too much from a business perspective, he has never known a community that taxed itself into prosperity, regardless of who was being taxed, which is why he voted no.
As for the tax increase’s impact on local hotels, city officials previously said it was unlikely to make much of a difference, since people do not typically shop for hotel rooms based on the tax rate, but instead based on how close they are to whatever attraction the person is looking to visit.
Ald. Jonathan Nunez, 4th Ward, who voted in favor of the tax, said he has heard concerns from some residents that visitors will stay in other towns because of the tax increase. However, as someone who travels across the country weekly for work, he said most companies are only looking at hotel rate and location when booking travel, so he doesn’t think it will have much of an impact on the city’s hotels.
The Hotel Occupancy Tax only applies to the price of the hotel room itself, not to other costs like room service.
The recent changes to the tax, set to go into effect at the start of next year, not only double the rate but also add a $10 daily flat fee on rooms offered for free, which city officials have said is a common practice at casino resorts like the one set to open in Aurora next year.
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Money collected by the city from the tax mostly goes into the city’s General Fund to offset operational costs, but the city also uses around $225,000 per year to support the Aurora Area Convention and Visitors Bureau.
At its current rate and number of hotel rooms, the city brings in between $550,000 and $585,000 each year from the tax, officials previously said.
The tax increase comes during what Mayor John Laesch has described as a difficult financial time for the city. When he took office in May, he said the number one thing his administration needs to do is get the city’s “financial house in order.”
In addition to raising taxes, Laesch noted at Tuesday’s meeting that the city was also cutting back in its budget, including by not filling some open positions and by putting off planned projects.