spent on tourism promotion or tourism development, with no greater than 30 percent entering the municipality's general fund.
5
With the foregoing in mind, the following table provides 10 years of estimated lodging tax revenue that could be generated from the lodging (rooms) revenue of the existing lodging supply in the City of Mequon at two levels - 5.0 percent and 8.0 percent - based on the range of lodging taxes being assessed in the surrounding municipalities (as presented in our earlier table.) We then estimated the allocation of the lodging tax revenue for tourism development and the city's general fund.
Estimated Lodging Tax Revenue City of Mequon, WI
Year Rooms Revenue Scenario 1: 5.0% Lodging Tax Scenario 2: 8.0% Lodging Tax
Total $ Amount (at 5.0%) 70% to Tourism Development 30% to General Fund Total $ Amount (at 8.0%) 70% to Tourism Development 30% to General Fund
Hypothetical Lodging Tax Revenues Using Historical Lodging (Rooms) Revenue Performance
2023 $2,869,776 $143,489 $100,442 $43,047 $229,582 $160,707 $68,875
2024 $2,667,420 $133,371 $93,360 $40,011 $213,394 $149,376 $64,018
2025 $2,742,230 $137,112 $95,978 $41,133 $219,378 $153,565 $65,814
Hypothetical Lodging Tax Revenues Using Estimated Future Lodging (Rooms) Revenue Performance
2026 $2,824,497 $141,225 $98,857 $42,367 $225,960 $158,172 $67,788
2027 $2,909,232 $145,462 $101,823 $43,638 $232,739 $162,917 $69,822
2028 $2,996,509 $149,825 $104,878 $44,948 $239,721 $167,805 $71,916
2029 $3,086,404 $154,320 $108,024 $46,296 $246,912 $172,839 $74,074
2030 $3,178,997 $158,950 $111,265 $47,685 $254,320 $178,024 $76,296
2031 $3,274,367 $163,718 $114,603 $49,115 $261,949 $183,365 $78,585
2032 $3,372,598 $168,630 $118,041 $50,589 $269,808 $188,865 $80,942
2033 $3,473,775 $173,689 $121,582 $52,107 $277,902 $194,531 $83,371
2034 $3,577,989 $178,899 $125,230 $53,670 $286,239 $200,367 $85,872
2035 $3,685,328 $184,266 $128,986 $55,280 $294,826 $206,378 $88,448
Source: REVPAR International, Inc.
Four of the seven municipalities have a 7.0 percent lodging tax, and the average lodging tax rate of the municipalities is 6.7 percent. A 5.0 percent lodging tax rate would yield the same combined lodging and sales tax rate as Cedarburg and would be the lowest in the area. An 8.0 percent lodging tax rate would position the combined lodging and sales tax just below the Milwaukee County hotels, which are the highest in the area.
Please note that there are other significant assumptions underlying these estimates. As such, this letter is subject to change pending receipt of new or additional information and should be primarily for internal use only.
We would be pleased to hear from you should you need further interpretation or amplification of the following findings.
Sincerely,
REVPAR International, Inc.
REVPAR International, Inc