Pleasanton council backs drafting a phased hotel tax measure to boost general fund revenue

The Pleasanton City Council voted unanimously on Feb. 3 to direct staff to develop draft ballot language for a phased increase in the city’s transient occupancy tax (TOT), commonly known as a hotel tax.

Staff told the council that Pleasanton’s current TOT rate is 8% and has not changed since 1983. Outreach to local hotel operators showed no active opposition and indicated the market could support a 12% rate; operators preferred phased implementation. Based on staff projections, moving from 8% to 10% (effective July 1, 2027) would yield roughly $1.4 million in additional annual revenue, and moving to 12% (effective July 1, 2028) would bring cumulative additional revenue to about $2.8 million annually. Staff estimated consolidated election costs between $242,000 and $339,000 and recommended a single-ballot measure with phased rates so a second voter approval would not be required to reach 12%.

Council members asked about the phased approach, the measure’s ability to address structural budget shortfalls, and whether the increase would harm hotel bookings. Staff and hotel operators said guests typically focus on advertised room rates and that modest TOT increases are not usually a primary booking factor; however, staff emphasized the measure would not fully close the city’s structural deficit but would help. Tim Howard, general manager of the Courtyard Marriott, urged a cautious approach and cautioned about potential long-term owner disinvestment if tax-driven room-rate compression reduces hotels’ revenue.

Council directed staff to continue coordination with regional partners, develop community education materials, and return with draft ballot language for council review no later than June 2026 in order to meet county submission deadlines in August. The motion to proceed with staff’s recommendation passed unanimously by roll call.