San Diego's Hotel Tax Increase Takes Effect, Expected to Raise $1.04 Billion

San Diego's hotel tax will increase starting Thursday, following voter approval of Measure C in 2020, which raises the transient occupancy tax based on proximity to the convention center. The new rates will be 11.75%, 12.75%, and 13.75%, with the highest rate applied to hotels closest to the convention center. The city projects the increase will generate an additional $82 million in fiscal year 2026 and $1.04 billion over the first decade. Revenue from the tax will primarily fund convention center improvements and operations, as well as homelessness initiatives in the first five years, and later include street repairs. The measure's implementation was delayed by legal challenges regarding voter approval thresholds, but the City Council ultimately decided a simple majority was sufficient under the California constitution. The tax applies to stays under 30 days at hotels, motels, RV parks, and bed and breakfasts.