Memphis Faces Scrutiny Over High Hotel Taxes as Tourists Experience Price Shock

Memphis: A Tourist’s Taxing Experience

When it comes to hotel stays, Memphis has earned quite the reputation for its sticker shock. Travelers checking out of their accommodations often find themselves facing a bill much higher than they anticipated. The city boasts some of the highest combined sales and hotel-motel taxes in the country, and it seems to have tourists scratching their heads and reaching for their wallets.

Just How High Are These Taxes?

Let’s break down the numbers. If you’re looking at a room at the Westin Hotel for December 17, the nightly rate looks appealing at $215. But wait until you get to checkout—you’ll fork over a whopping $256.24! This isn’t an isolated incident. The Hu Hotel advertises a $139 room rate, but the final bill ends up being $170.94. And don’t get us started on the downtown Sheraton Hotel, where a $126 room morphs into $157.30 after taxes and fees. With an eye-popping 18.25% tax rate adding up from various state and local taxes, it’s no wonder guests feel overwhelmed.

What’s behind these astronomical prices? Well, in addition to the room rate, travelers find a 7% state sales tax, a 2.75% local option sales tax, a 3.5% hotel-motel tax, and a 5% Shelby County hotel-motel tax all packing on those extra dollars. Adding to the absurdity, there’s even a $2 per night Tourism Improvement District fee, first introduced in 2016, to help fund city marketing efforts. This hefty tax burden places Memphis among the top contenders for the highest lodging taxes in the U.S., and travelers are taking notice.

The Resort Fee Runaround

But wait—there’s more! The Peabody Hotel and Bass Pro Shops’ Big Cypress Lodge on the riverfront both add a resort fee to their already inflated prices. The Peabody charges an additional $13.95 per night, while Big Cypress Lodge takes it even further with a staggering $40 fee per night. So, what does all this money get you? Well, the Peabody’s resort fee rolls in perks like Wi-Fi, morning coffee, and access to the gym and pool. But many guests are left wondering why these should come at an extra cost in the first place. After all, isn’t Wi-Fi now considered a basic hotel amenity?

At Big Cypress Lodge, guests can expect similar services such as gym access, daily parking, and even towel service, but at a jaw-dropping mark-up. If you thought you could snag a cozy $229 room there, think again. When all is said and done, you’re forking over a total of $316.70! That translates to a downright shocking 38% increase in your nightly rate. Talk about some serious price gouging!

Memphis in the National Tax Spotlight

According to the recent 2024 HVS Lodging Tax Report, Memphis ranks as the fifth highest city for lodging taxes in the U.S. Thankfully, New York and Washington, D.C., aren’t too far behind. It’s crucial to note that this ranking was calculated without including a 0.5% tax that, when added, bumps Memphis right up to the fourth spot.

Only cities like Omaha (20.5%), Cincinnati (19.3%), and St. Louis (18.93%) surpass Memphis when it comes to taxing unsuspecting guests. For reference, Los Angeles is at 15.5%, Miami is at 14%, and San Francisco is at 16.75%. It’s worth noting that these taxes started back in 1988, when state law permitted cities to implement hotel-motel taxes.

Memphis saw similar growth patterns over the years, shifting from a sleepy regional tourism hub to a more bustling economy, largely thanks to the control of its hotel-motel taxes and the revenue generated from them. In a time when local authorities are facing budget cuts and funding challenges, it’s no wonder travelers are feeling the pinch as they pack their bags to experience music, BBQ, and Southern hospitality in Memphis.

A Double-Edged Sword

So, what does all this mean for our lovely Memphis? On one hand, these taxes have helped fund numerous industry initiatives—improvements to venues, festivals, and community events. But on the other hand, they are leading to an unfortunate reality for tourists who might have left with a smoky flavor in their mouth for different reasons.

As they explore the soul of Memphis, it seems that visitors might want to pack a bit more cash for those unexpected fees, as well as prepare themselves for the reality of checking out with a hotel bill that might send shockwaves through their wallets. But for the savvy traveler, knowledge is power; so maybe plan your stay to avoid the worst offenders, or simply brace yourself for the rollercoaster ride of tax hikes and fees that all come with an unforgettable trip to the Bluff City!