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Welcome to Bo$ton

Staying, dining in Hub will probably get pricier as bills to increase taxes go before the City Council

By David Abel
Globe Staff / August 16, 2009

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It’s increasingly expensive to be a tourist in Boston.

In just about six weeks, the cost of staying in a hotel and dining at a restaurant in Boston will probably climb, and not just because of the sales tax increase that took effect this month. If endorsed by the City Council, as is expected, the hotel tax will rise to 14.45 percent, up from 12.45 percent, and the meals tax will jump to 7 percent, up from 5 percent last month.

And that is on top of fees and taxes that hit those who arrive at Logan International Airport before they even land, with average domestic ticket prices higher than at most other major airports and a mix of taxes and fees such as a $4.50-per-ticket “passenger facility charge,’’ the maximum the federal government allows airports to charge to help subsidize their building projects.

Visitors who rent a car at the airport can expect a slew of add-on fees that now amount to one-third of the overall price. For example, a compact car rented for one day at a base rate of $62.69 at Avis would now have a total cost of $93.88, which includes six different fees, from Logan, the state, and the rental company, such as the year-old $4 “customer facility charge’’ designated for a yet-to-be-built rental car facility.

The restaurant and hotel taxes are increasing as the number of visitors to Boston fell 6 percent in the first six months of the year, compared with the same period last year, according to the Greater Boston Convention & Visitors Bureau. Over the same period, the city’s hotel room occupancy rate fell 12 percent, according to Smith Travel Research, a Tennessee-based company that monitors trends in the hotel industry.

“Boston is not the only city increasing its taxes and fees, and we’re not worried that people are going to decide not to come here because of the new taxes,’’ said Patrick B. Moscaritolo, president of the Greater Boston Convention & Visitors Bureau, who blamed the falloff of tourism on the global recession and pointed out that Boston has lower taxes than many other large cities. “Most people are more focused on the experience and what the destination offers than taxes,’’ he said.

Tourists are taking similar hits around the country.

For example, the hotel tax in Hawaii increased 1 percentage point to 8.25 percent this summer and is scheduled to increase to 9.25 percent next July.

Nevada raised its hotel tax rate 3 percentage points, boosting the hotel tax rate in Las Vegas to 12 percent. In New York City, hotel taxes increased to 14.76 percent, up 0.5 percentage points, and with the city’s $3.50 a night surcharge, the taxes and fees on a $200 room amount to more than 16.5 percent.

Overall, Boston ranks near the middle of the country’s top 50 cities in terms of hotel and meal taxes, but Logan has become among the most expensive airports for car rentals, according to a survey by the National Business Travel Association, a Virginia-based group that represents the business travel industry.

In its survey last year, the group reported 18 of 50 cities surveyed had a hotel tax rate higher than 14.45 percent, Boston’s proposed new rate, with Nashville the highest at 17.18 percent and Las Vegas the lowest at its previous 9 percent rate. The survey found 33 of the cities had higher meal taxes than Boston’s planned 7 percent, with Chicago the highest at 10.25 percent - which has already risen this year to 11.5 percent - and Portland, Ore., the lowest, with no meal tax.

But of the 50 cities, only Chicago added more taxes and fees to the price of a rental car, last year’s survey found. Rental car companies now add nearly 23 percent in taxes and fees to the bill of cars picked up in downtown Boston.

“Even with the higher taxes, Boston remains in the middle of the pack,’’ said Fay Beauchine, president of National Business Travel Association’s Foundation, which oversees the survey. “The question is whether companies and other visitors will decide it’s too expensive and choose other cities to hold their conventions in.’’

Local restaurateurs and hotel operators said they are not concerned.

While many opposed the tax increases, they said they were more concerned about the precedent than the effect of those scheduled to start in the fall.

“I don’t see it affecting tourism,’’ said Paul J. Sacco, president of the Massachusetts Lodging Association, which represents more than 400 hotels and other inns in the state. “As a rule, we don’t support increasing taxes, but I don’t think a 2 percent increase will have a long-term impact. I just don’t want to see them go up further next year. Then it would start impacting convention business and other segments.’’

And most tourists taking in the sights in Boston last weekend shrugged off the prospect of raised taxes as generally reasonable or just inevitable.

Ed Johnson, 51, here on a short trip with his 14-year-old daughter from Troy, N.Y., said taxes are part of the recession. “It’s just a sign of the times,’’ he said at Faneuil Hall. “The state’s trying to get revenue and that’s how they do it. If it’s too high, maybe there’ll be another Boston Tea Party. Who knows?’’

At Logan Airport, Larry Self, his wife, and their teenage son and daughter were wrapping up a week’s vacation. The family had rented a car to tour the Cape and spent some time in Boston before heading home to Wichita, Kan.

Self said his 18-year-old son is considering moving to the Northeast after college, but Self said he would think twice about returning to Boston if an increase in hotel and meal taxes is approved.

“When things get so expensive, you can’t go as much as you want,’’ Self said.

But his wife, Sharon, said she knows that visiting New England comes with a higher price tag.

“There are certainly a lot less expensive places to vacation, but that’s kind of the whole Northeast in general,’’ she said. “You do have to decide to spend more on vacation.’’

Peter Christie, president of the Massachusetts Restaurant Association, said the owners of the 5,000 restaurants he represents are more concerned about the effect of the tax increases on local residents than on tourists.

He added that many restaurateurs feel singled out, given that few other taxes target specific businesses.

“Why should a lunch salad be treated any differently than the sale of a flat panel TV?’’ he said. “I don’t think we’re taxing ourselves out of the market. I just worry about this being part of a slippery slope.’’

Globe correspondent Hannah McBride contributed to this report. David Abel can be reached at dabel@globe.com.