TO: Members of the New Jersey General Assembly

FROM: Hilary Chebra, Manager, Government Affairs, CCSNJ

RE: A-6257 (McKnight)

DATE: January 10, 2022

The Chamber of Commerce Southern New Jersey (CCSNJ) would like to voice our opposition to A-6257 (McKnight), which imposes a temporary $3 per room surcharge on hotel occupancies in Atlantic City to fund public safety services.

The hotel and tourism industry struggled more than most during the pandemic. According to the most recent Tourism Economic Impact Study, visitation in 2020 fell to levels last seen in 2012, with a 27 percent drop in visitation. With new variants of the COVID-19 virus continuing to arise, air travel is again being restricted and many are choosing drivable day trips as an alternative. With an additional surcharge on hotel rooms that will be passed on to the consumer, the higher price of visiting Atlantic City will force visitors to look elsewhere. This surcharge is an additional tax on overburdened New Jersey residents who are attempting to find an affordable vacation following over a year or no or limited travel.

As written, A-6257 (McKnight) will only impact Atlantic City and nearly all of the City’s economy depends on the leisure and hospitality sector. According to the Summer 2021 edition of the South Jersey Economic Review released by Stockton University, the hospitality sector, which includes hotels and accommodations, remains central to Atlantic City’s economy. The sector’s share of Atlantic City’s GDP is five times greater than its share of statewide GDP.

Additionally, Atlantic County during the midst of the pandemic last June had an unemployment rate double that of the state and nation at 33.3percent, with Atlantic City, up to 29.1% percent according to the U.S. Department of Labor.

The state should be working to ensure that Atlantic City remains an attractive and affordable destination for visitors. Imposing additional taxes on Atlantic City’s hotels will make it a more expensive place to visit and deter visitors.

Thank you for allowing the Chamber to express our concerns with A-6257 (McKnight).