Door County’s lodging industry saw continued revenue growth in 2022, as a room tax rate increase led to a significant jump in tax revenue, according to a report presented at the Door County Tourism Zone Commission’s annual meeting Thursday.
Total lodging revenue in the county rose 5 percent compared to 2021—from $133.3 million to $140 million—the report shows. Meanwhile, total room tax revenue, driven by the rate increase from 5.5 percent to 8 percent that took effect last year, jumped from about $7.3 million to $11 million, an increase of 52 percent.
Rentals in what the Tourism Zone Commission calls the “cottage/cabin/house” category, which contains most of the county’s short-term rentals, saw the largest revenue increase. Total revenue in that category rose 9 percent compared to 2021—from about $40.5 million to about $44.3 million.
Revenue from rentals of cottages, cabins and houses, including those rented on sites such as Airbnb and Vrbo, has soared in recent years. After first surpassing revenue from hotels and motels in 2019, it exceeded hotel and motel revenue by about 45 percent in 2022.
Revenue rose by about 6 percent in both the hotel/motel and resort categories. It increased from $28.9 million to $30.5 million for hotels and motels, and from $43.4 million to about $46 million for resorts. Revenue for individual condominium unit rentals rose by about 5 percent, while revenue for inns dropped by about 4 percent.
The revenue growth in most categories came because of increased nightly rates charged to guests and despite decreased occupancy rates, the report shows. Rentals in the cottage/cabin/house category had decreased occupancy compared to 2021, like other categories, but they had the largest increase in average nightly rate.
Average nightly rates in most categories increased in 2022 after dropping in 2021.
Tax revenue to municipalities increases
The total room tax revenue that went to municipal governments also jumped significantly, due in large part to the tax rate increase. It rose from about $2.2 million total in 2021 to about $3.3 million in 2022, an increase of 52 percent.
Thirty percent of each room tax dollar collected goes to the municipality in which it was collected.
The Village of Sister Bay, the City of Sturgeon Bay, the Town of Gibraltar and the Village of Ephraim were the municipalities in which the most room tax revenue was collected, with their total amounts collected ranging from about $1.6 million to about $1.25 million.
The total number of lodging business permits in the county as of Wednesday was 1,485, Tourism Zone Commission administrator Juliana Behme said – more than double the 729 permits that were active in the commission’s early days in November 2008.