More than one year after passage of the 4 percent lodging tax increase, area hotels' occupancy rates are increasing from last year, while rates have been dropping.
Steve Picker, executive director of the Jefferson City Convention and Visitors Bureau, said occupancy rates are up by 3.3 percent compared to 2011 as of April, but average daily rates offered by hotels have dropped 3.9 percent in that same period.
While Picker cites national economic fallout and a slow recovery as a cause for the numbers, local hotelier Vivek Puri attributes the declining daily rates to the lodging tax increase.
"We had to drop our rates by 4 percent, the magical number, just to get 1.1 percent more business than we already had," Puri said, adding the area's occupancy rates dropped 1.2 percent from 2010 to 2011. "It becomes a vicious cycle."