Council kills proposed 12.5% lodging tax and $10 nightly fee after hours of public comment

Lynchburg City Council on May 27 heard extensive public comment and debate over a staff proposal to raise the city’s transient lodging tax to a maximum of 12.5 percent on room rate plus a $10 per‑night flat fee. The proposal drew strong opposition from short‑term rental hosts, hotel operators, local restaurateurs and business groups, who warned it would make Lynchburg among the most expensive overnight destinations in Virginia and could drive visitors and conventions to neighboring localities.

Speakers at the public hearing described the diversity of the city’s lodging market, from independent bed‑and‑breakfast owners to downtown hotels and hundreds of Airbnb hosts. Amy Corbett, who manages boutique short‑term rentals in Lynchburg, told council, “This proposal is 12.5% plus $10 a night…this increase is extreme,” and warned that the change could deter visitors who otherwise bring restaurant and retail spending to the city. George Stanley of the Virginian Hotel said the change “threatens to raise prices on the average hotel room in Lynchburg by more than 13%…If occupancy falls, people who would otherwise come here stop visiting Lynchburg.”

The Virginia Restaurant, Lodging & Travel Association and the Lynchburg Regional Business Alliance urged the council to be cautious and to pair any tax changes with a tourism‑development plan and economic impact analysis. Small hosts and long‑time operators said the proposed flat fee would disproportionately affect budget travelers, parents visiting Liberty University students and family members attending funeral services.

Council action unfolded in several steps. Early in the meeting a council member moved to deny the proposed lodging tax increase and the council’s voting machine recorded that motion as passing 6‑1. Later, some members successfully moved to reconsider the denial and bring the item back for discussion — the motion to reconsider succeeded 4‑3. After further debate and cross‑examination and additional public input, council voted 5‑2 to postpone reconsideration indefinitely, effectively removing the specific 12.5% plus $10 proposal from immediate consideration.

Why it matters: The lodging tax is paid largely by visitors, and it funds tourism, events and sometimes general fund priorities. Opponents argued a sharp increase could reduce overnight stays and cost local jobs and restaurant and retail revenue. Supporters of finding new local revenue sources argued the city faces budgetary pressure and sought options short of a large real estate‑tax increase on homeowners.

What’s next: The council did not adopt the 12.5%/$10 proposal. Because council later voted to postpone reconsideration indefinitely, staff and council will need to determine whether to bring back any lodging tax proposal at a lower rate and with an explicit plan for using the new revenue; the record shows council members asked for further impact study and for proposals that pair rate changes with tourism investment plans.