CLEVELAND — Cleveland hotels are protesting a proposed tax hike – a 1% addition to the bed tax to help pay for a new Browns stadium in Brook Park.
That tax would be a small piece of the puzzle for the $2.4 billion stadium project. But hotel operators say it would add to an already outsized burden on travelers and businesses.
“Cleveland already has one of the highest tax rates at checkout in the entire nation. Even higher taxes can make us less competitive,” the Cleveland Hotel Association wrote in a letter this week to the Greater Cleveland Partnership, the local chamber of commerce.
Guests currently pay a 17.5% tax rate on rooms in the city. That’s a combination of bed taxes and sales taxes. And it is, indeed, one of the highest rates in the nation – topping what travelers see tacked onto their bills in New York, Los Angeles and Las Vegas.
It’s also more than visitors pay in many peer cities, including Detroit, Pittsburgh and Milwaukee, according to a 2024 report from HVS, a global consulting firm.
The proposal from the Browns would lift the rate to 18.5% by raising the Cuyahoga County bed tax from 6.5% to 7.5%.
That change would require state-enabling legislation and county approval. Cuyahoga County Executive Chris Ronayne has been a vocal opponent of the Brook Park plan.
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The hotel-tax increase probably would add $1.50 to $2 a night to the average hotel bill, based on recent Cleveland-area rate figures from CoStar, a real estate data company.
That might not seem like much. But hotel owners and operators aren’t happy.
“For us, it’s a significant piece,” Robert Hill, the chairman of the Cleveland Hotel Association, said during a phone interview.
Hill is the area general manager for InterContinental Hotels Group, responsible for a cluster of hotels near the Cleveland Clinic. He’s one of four association representatives who signed the letter to the Greater Cleveland Partnership.
The others were the general managers of the Hilton Cleveland Downtown, the Hyatt Regency Cleveland at the Arcade and the Crowne Plaza Cleveland at Playhouse Square.
The hoteliers aren’t taking a position on where the Browns should play. They just don’t want higher hotel taxes to be part of the game plan.
Hill said the association heard back from the Greater Cleveland Partnership, which is setting up a meeting about the hotel-tax issue. Baiju Shah, the chamber’s president and CEO, confirmed that a meeting is in the works.
News 5 reached out to more than a dozen Cleveland hotels with interview requests about the potential impact of a bed-tax hike on their businesses. The general managers either did not respond to or declined requests for on-camera interviews.
A spokesman for the Browns and Haslam Sports Group said the organization has met with members of the hotel association to explain the Brook Park project and get feedback.
“We appreciate the ongoing dialogue and look forward to further conversations on making this transformative project a reality for Northeast Ohio,” he wrote in a text message.
An industry expert told News 5 the hotels have a legitimate concern.
“When you raise the lodging tax, it raises the overall bill for the customer – and it makes it harder for the hotel to raise their rates themselves, to have more money to pay their staff and do other maintenance and things like that,” said David Sangree, a longtime consultant and the president of Hotel & Leisure Advisors in Lakewood.
Sangree said 1% on its own isn’t much. But hotels are feeling the cumulative effect of tax hikes over the years.
The last one took effect in 2020, after Cuyahoga County Council approved a 1% increase to help run and maintain the Huntington Convention Center of Cleveland and to free up other cash for the Rock & Roll Hall of Fame induction ceremonies and upgrades to Progressive Field and Rocket Arena, which are both Downtown.
“The idea of the Browns stadium has some merit,” Sangree said of the Brook Park proposal, which worries Downtown hotels but could be a boon for some suburban properties. “Having an enclosed stadium is beneficial. But how it should be paid for, I just don’t know. Because the amount of money is quite high.”
The Browns are seeking $1.2 billion in public funding for the stadium, which would be the centerpiece of a 176-acre mixed-use project. They’ve asked state and local governments to borrow that money by issuing bonds, then repaying the debt using a range of tax revenues from the broader stadium district.
Haslam Sports Group says the public ultimately will make money on the deal. But two state agencies questioned about the team’s projections this week, calling them “overly optimistic” in letters released Monday.
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The Browns pushed back on those critiques, saying they contained misinformation.
The hotel association raised similar concerns in its letter this week, saying forecasts related to the hospitality and dining impacts from the project “may be overstated.”
Hill said the hotel industry is in the best position to evaluate those projections.
“We have only seen what’s out there in the public and what’s been shared in presentations,” he said. “We haven’t seen anything specifically in writing. But from what we have seen, some of the numbers look like they’re a little inflated in terms of the number of room nights that would be generated from the events.”
