Taxing the Travelers: A Note on Hotel Tax Incidence

This paper uses state-level monthly hotel occupancy and price data to examine the effects of a $5 per night hotel tax imposed by Georgia in 2015. The results indicate that the tax caused both a decrease in hotel occupancy and a decrease in the net of tax price received by hotels in Georgia, though the latter effect is imprecisely estimated. The implied price elasticity of demand of -0.7 is somewhat larger than previous ndings in the literature and suggests that states choosing to adopt hotel taxes do suer some economic distortions as a result.