Hotel tax hike would still leave Indianapolis low-cost rooms

INDIANAPOLIS – Indianapolis has such low hotel room prices that some in the tourism industry say a proposal raising the city’s hotel taxes to among the highest in the nation might not harm its low-cost reputation.

Convention and event planners look at all expenses when deciding which locations to pick, including hotel rates and the cost of getting around the area, said Dave Sibley, chief executive of Merrillville-based White Lodging, which runs three downtown Indianapolis hotels and is co-developing a 1,600-room hotel complex near the Indiana Convention Center.

“It’s not just going to be the tax rate (meeting planners) look at,” Sibley told The Indianapolis Star. “When you add the tax on top of it, our room rates are still going to be lower.”

But others in the hospitality industry oppose raising the tax from 9 percent to 10 percent as part of a proposal to help fund the struggling agency that runs the city’s major sports stadiums. With the state sales tax of 7 percent, the total room tax would jump to 17 percent, putting Indianapolis hotel rooms among the highest taxed in the nation.

“Any time you are at the highest point in the country, your competition’s going to try to use it against us,” said Phil Ray, general manager of the downtown Omni Severin Hotel and president of the Greater Indianapolis Hotel Lodging Association. “There’s a potential it could work against us.”