LENOX — Tourism, the linchpin of the town’s economy, continues a supercharged expansion that began late last winter, despite the ongoing impact of the COVID-19 pandemic.
Revenue returned to the town for its 6 percent add-on to the statewide 5.7 percent lodging tax surged to $1,161,000 for May through July room rentals. Not surprisingly, that’s up sharply from $519,000 during the same pandemic-dominated period last year. But, it’s dramatically higher that the $672,000 for the pre-pandemic 2019 months.
Why it matters: Combined with $4.2 million in “free cash” reserves, as recently certified by the state, it’s “remarkable,” Town Manager Christopher Ketchen told the Select Board this week. The “free cash” total is the second highest in the town’s history, along with $1.3 million in additional “stabilization” reserves.
What explains the rooms tax surge?: After a muted 2020 season amid the worst of the pandemic, visitation to Lenox bounced back spectacularly starting in February. Then, for the first three months of the warm-weather season, responding to pent-up demand, many hotels increased their room rates, joined by a half-dozen downtown inns, renovated and revived under new ownership.
• Major players like Canyon Ranch and the new high-end Miraval resort with its Wyndhurst Manor & Club (formerly Cranwell) were the top contributors to the rooms tax haul, along with Courtyard by Marriott and other prime destinations.
How about the meals tax?: It hit the expected target of $84,000 for May through July, on par with the 2019 pre-pandemic results, but there was no increase. Many restaurants have had to cut hours and days of operation because of severe staffing shortages.
The big picture for residents: The financial cushion keeps property tax increases at a moderate 2 percent a year on average, or less. For the 2021 fiscal year (July 1, 2020-June 30, 2021), the town froze property taxes at the previous year’s level to help residents cope with the pandemic’s economic fallout.
What they’re saying: “We can feel pretty good that the town is well-positioned in terms of cash,” Ketchen said, “a lot of good news on the revenue side.”
“This is great news,” Select Board Chair Marybeth Mitts enthused, “and it’s great to know we’re exceeding our target and we’re well within our budget.”
What’s next: The town will be planning how to spend more than $1.4 million in American Rescue Plan Act money for projects beginning in 2024 and completed in 2026. The U.S. Treasury Department lists the seven categories eligible for the federal money: public health, public health impacts caused by the pandemic, lost revenue to the town, premium pay for essential workers, and three types of utility projects — water, sewer and broadband.
• Also, since the state’s emergency orders that loosened restrictions on outdoor dining and off-premises alcohol consumption expire in April, town leaders are planning how best to continue the highly popular, vibrant, lively outdoor dining scene.
“To maintain this new vibe we’ve created, there’s no better time than now to begin that discussion,” Ketchen said.
Mitts predicted adjustments in town bylaws.
“It’s clearly what people want now, so, we should hit the ground running next spring,” Selectman Edward Lane said.