Lynchburg City Council debates transient lodging tax increase amid local business opposition

The Lynchburg City Council convened on June 10, 2025, to discuss a proposed increase in the transient lodging tax, which would raise the rate from 6.5% to 8.5% and the per-room occupancy fee from $1 to $3. This proposal has sparked significant debate among local residents and business owners, many of whom voiced strong opposition during the public hearing.

Local business owners, including those from the hospitality sector, expressed concerns that the tax hike would place an undue burden on their operations and deter tourism. Adam Hall, a resident and small business owner, argued that the increase would make Lynchburg one of the most heavily taxed localities for overnight stays in Virginia, potentially harming local businesses and driving visitors to neighboring areas with lower taxes. He emphasized the need for shared responsibility in addressing the city’s budget shortfalls rather than targeting a single industry.

Several speakers highlighted the potential negative impact on the local economy. Eric Terry, president of the Virginia Restaurant Lodging and Travel Association, pointed out that Lynchburg's occupancy rates are already below the state average, and increasing taxes could further diminish competitiveness with nearby cities. He called for a more collaborative approach with the hospitality industry to find solutions that benefit both the city and local businesses.

Others, like Cam Colquitt, who operates an Airbnb, warned that the proposed tax increase could lead to a significant decline in local tourism spending, estimating a potential loss of $4 million in tourism-related revenue. This sentiment was echoed by multiple speakers who urged the council to reconsider the proposal, citing the risk of losing not only lodging revenue but also the associated economic benefits for restaurants and retail businesses.

In response to the concerns raised, some speakers suggested a compromise, proposing a smaller increase to 7.5% for the lodging tax and $2 for the occupancy fee, which they believe would still contribute to the city’s revenue while maintaining competitiveness.

As the council deliberates on this proposal, the discussions reflect a broader concern about the balance between generating necessary revenue for the city and supporting the local economy. The outcome of this meeting could have lasting implications for Lynchburg's hospitality industry and its overall economic health.