This summer, you might be hard-pressed to find a hotel room in Juneau on short notice — especially as the first Ironman in Alaska draws near.
“Unless somebody makes a cancellation or something happens, we have been totally booked up that time of the week,” said Cleveland Mitchell, the hotel manager for the Frontier Suites Hotel near the Juneau International Airport. However, Mitchell and other hotel operators said they’re already considerable busy.
That translates to rosy projections for hotel bed tax revenue for the City and Borough of Juneau.
The hotel bed tax revenue in Juneau for the quarter of July through September is forecast to rank as the second-highest it’s ever been, according to the CBJ budget. It comes on the heels of last year’s record-setting haul.
Last year’s revenue totaled around $1 million in just a short three-month span — three times its expected projections — and rose $650,000 over its budgeted amount.
According to Jeff Rogers, finance director for the CBJ, this year’s revenue won’t be as significant but is still projected to be close behind at $860,000.
“Last year’s number for this quarter was unprecedented,” Rogers said. “Hotels just cost a lot more today than they even did a year or two ago,” Rogers said.
Why are revenues so high?
Rogers said he can’t attribute a specific reason as to why last year’s hotel bed tax revenue rose to record-setting levels, although he said the rise in the CBJ hotel-motel tax rate from 7% to 9% — that voters approved in 2019 to be put toward Centennial Hall renovations for 10 years — definitely played a role. He also attributed current inflation and an influx of independent traveling as potentially adding to the rise.
“We’re seeing higher hotel costs, we’re seeing the tax rate 2% higher than it used to be,” he said.
Lacy Glaum, a sales representative at both the Four Points by Sheraton and Westmark Baranof Hotel, said she’s noticed that uptick.
“Definitely I would say that the whole town is more expensive to stay in this year compared to last year and I would say it’s due to supply and demand because there is such a higher demand this year than there was last year — the prices are definitely higher,” she said.
Last year’s record-setting total came under similar but distinct circumstances.
Rogers said when the pandemic first began, the quarter of July through September was significantly lower because of less travel and tourism. This resulted in the hotel bed tax revenue taking in less than a third of what the revenue would shoot up to the following year. He said a big factor that he attributes to last year’s revenue spike was quarantine restrictions. Hotels found new life by housing people who traveled to Juneau for work that required quarantine and also hosted independent travelers that came to Juneau.
Rogers said an increase in hotel tax revenue means more money can be put toward the programs the money is allocated to, which include around 7% to operations and improvements at Centennial Hall and 4% going to tourism promotions contracted out to Travel Juneau. In certain instances when hotel bed tax revenue goes over projections, a small amount is available for other tourism or housing related issues. On Friday, Rogers said the city introduced a $20,000 spending allocation from the hotel bed tax revenue fund to contract an outside firm to collect data on the number of short-term rentals in the area.
Liz Perry, the president and CEO of Travel Juneau, said Juneau welcomed a “fair bit” of independent travelers last year along with many smaller ships with turn-around points in Juneau. Both contributed to the number of travelers staying in hotels — and this year’s amount of independent travelers is looking to be similar.
Rogers said that even though the amount of bed tax collected this quarter is predicted to be lower than the year prior, it is still the second-highest number the city has ever had.
This season is a marathon
Juneau’s hotel room and registered Airbnb capacity is approximately 1,300 rooms said Perry, which is far less than the approximately 3,000 participants, visitors and supporters who will make their way to town for the Ironman triathlon that is set to take place in less than a month.
Perry said in the early stages of making Juneau the first host city of the Ironman in Alaska a reality, there was a lot of discussion around the capacity that Juneau can hold. There was a big push for people to open their homes for the race, which she said was successful and noted “the athletes by and large are housed.” Perry said she anticipates the Ironman will bring a significant amount of hospitality-related revenue to the local economy, with an estimated $7 million of economic impact, and “that’s a conservative estimate,” Perry said.
“The price of hotels has gone up, and the race is a huge opportunity for businesses in Juneau,” Perry said.
Rogers said he would not be surprised to see hotel room rates significantly increase during that week of the race, but even with the influx of visitors because of the race, he is confident that the prediction of this year’s tax revenue is fairly accurate and will likely stay below last year’s amount. He said there still is a possibility that the forecast could be too low, but considering last year’s unexpected jump, this year’s prediction is discounted to a reasonable median amount. However, according to multiple hotel operators, they are already seeing much higher price rates along with booking numbers that far surpass this time last year in Juneau. How much hotel bed tax revenue the CBJ brings in each quarter does not directly correlate with the price or amount of occupancy in Juneau, but it does give insight into how each year compares to one other.
“Rates are really high around that area, so we will see really high rates which means really high taxes during that period,” Rogers said. “I think the Ironman is going to be really hard to wrap our arms around, obviously, there are a lot of people coming to town, but the vast majority will only be here for a short few days.”
Glaum said the busy times extend beyond when the Ironman is in town, noting that “this season we’ve been consistently sold out pretty much all of June, and are almost completely sold out of all of July and August as well — this year is going really great compared to last season,” she said.
She said she would attribute the rise in demand due to tourism opening up, and a rise in independent travel has been “much better” this year than in previous years. She said it looks like the entire summer will be in “full swing” and notes it feels similar to a pre-covid summer. Glaum said one of the biggest reasons she thinks this summer has been so busy and booked is due to the up-and-coming Ironman race.
“The Ironman 100% plays a factor, like 100% of the whole town is booked out,” Glaum said.
• Contact reporter Clarise Larson at email@example.com or (651)-528-1807. Follow her on Twitter at @clariselarson.