Santa Fe Council evaluates tourism growth and budget impact from events and lodgers tax

During the recent budget meeting held by the Santa Fe City Council on May 1, 2025, discussions centered around the city's tourism revenue and its implications for local funding. The meeting highlighted the significant role that tourism plays in Santa Fe's economy, particularly through the lodgers tax, which has seen a notable increase as the city rebounds from the pandemic.

Council members praised the efforts of city officials in managing tourism and its associated revenues. A key point raised was the increase in average lodging rates, which have risen by 30% since 2022, far exceeding inflation rates. This surge is attributed to a strong pent-up demand for travel and strategic pricing decisions made by local hotels, including the Rosewood and Four Seasons. These hotels set higher rates to recover from pandemic losses, prompting other establishments to follow suit.

Councilor Cassel emphasized the importance of tourism as a financial backbone for the city, noting that it funds essential services such as parks. The council discussed the balance between attracting new events and managing the costs associated with them, including expenses for city services like police and fire support. There was a consensus that while tourism generates significant revenue, it is crucial to ensure that the costs incurred by the city do not outweigh the benefits.

City officials reassured council members that gross receipts tax, which encompasses all spending by tourists beyond lodging, is robust enough to cover any additional costs from events. This tax is expected to rise alongside tourism, providing a financial cushion for the city.

The meeting also touched on the importance of measuring the economic impact of various events, such as Dia de los Muertos and Pride celebrations, to ensure they contribute positively to the local economy. The city has begun reinstating economic impact statements for major events to assess their success and recovery post-pandemic.

In conclusion, the Santa Fe City Council's budget meeting underscored the critical relationship between tourism and the city's financial health. As Santa Fe continues to attract visitors, the council remains focused on leveraging this revenue while carefully managing the associated costs to maintain a balanced budget. Future discussions will likely explore further strategies to enhance tourism's benefits for the community.