May 29, 2026
Colleen Claggett/For PhillyVoice
The Pennsylvania Convention Center Authority, Philadelphia Convention and Visitors Bureau and Visit Philadelphia say they oppose Mayor Cherelle Parker's proposed hotel tax increase because it sets a 'concerning precedent' by using the revenue to fund municipal services.
Three tourism groups come out in opposition to Mayor Cherelle Parker's revised hotel tax proposal on Friday — two days after she said it had the backing of the hospitality sector.
The revised proposal would raise the tax rate on hotel stays from 15.5% to 16.1%. The tax rate on short-term rentals like Airbnb would spike from 15.5% to 21.5%. The increases would generate an addition $75 million over the next five years and be allocated for homeless services.
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In a joint statement Friday, the Pennsylvania Convention Center Authority, Philadelphia Convention and Visitors Bureau and Visit Philadelphia said the proposed policy would set a "concerning precedent."
"The Pennsylvania Convention Center Authority, Philadelphia Convention and Visitors Bureau and Visit Philadelphia remain opposed to increasing hotel occupancy taxes or diverting those revenues away from tourism and hospitality, the industry those funds were specifically created to support," the statement said.
Any tax hike should be used to "support efforts that drive visitation and overnight stays" instead of municipal services, the tourism groups said. They suggested more funding be earmarked for initiatives like PHL Cares, a business-led fund that raises money for the city's homeless population through programs like rental assistance.
"Diverting these funds sets a concerning precedent and places an additional tax burden on visitors who already contribute significantly through taxes and fees during their stay, making Philadelphia less competitive," the statement said. "We firmly believe the city can address these challenges through alternative strategies that do not put Philadelphia's hospitality jobs or tourism economy at a competitive disadvantage."
Parker's office did not immediately respond to a request for comment.
Hotel and Airbnb guests currently are taxed 8.5% by Philadelphia and 7% by Pennsylvania on their total costs-per-stay. Together, that equates to a 15.5% tax.
Parker initially proposed raising the city's rate by 2%, beginning in August, for both hotels and short-term rentals. But she revised it so that the hotel tax only would rise 0.6% while the short-term rental tax would increase 6%.
Parker announced this "tentative agreement" between city officials and hospitality leaders Wednesday. It came about two weeks after the three tourism groups and the Greater Philadelphia Hotel Association and the Pennsylvania Restaurant & Lodging Association sent a letter to City Council members, urging them to reject Parker's original proposal.
"This would be the first time the hotel tax funds a city service rather than an initiative directly tied to leveraging the economic competitiveness of our industry, setting a dangerous precedent for the City and the Commonwealth," the organizations wrote in the May 5 letter.
Ed Grose, president and CEO of the Greater Philadelphia Hotel Association, said his organization agreed to the new terms after extensive discussion with its members and partners in the hospitality and business sectors. But he said the decision "did not come lightly."
"We believe this additional tax has brought Philadelphia to the limit of what can reasonably be imposed on the hotel industry through additional taxation," he said in an email earlier this week. "While we are committed to Philadelphia's success, that cannot mean continually increasing the tax burden on hotels and their guests, thus undermining our efforts to attract visitors and create jobs in the city."
