Hotel tax revenue sees increase [Corrected]

COSTA MESA — Both Newport Beach and Costa Mesa's hotel tax revenues increased by double-digit percentages in the first quarter of the fiscal year, marking strong summer tourism that city officials hope will continue through the winter months.

According to Newport Beach's quarterly financial report, revenue from the city's transient occupancy tax (TOT) — the tax added to hotel/motel stay bills — shot up 14.75%, or more than $1.6 million, in July, August and September compared with the same quarter in 2010.

Newport Beach officials credited the Pelican Hill Resort, which opened in 2008, with helping the city's gains.

"They had a very good year," said Newport Beach Finance Director Tracy McCraner. "They're just finishing up their third year, so they seem like they're in full swing."

"We opened the resort with 100 years in mind, with no good time or bad time," said Ralph Grippo, president of the Irvine Co.'s resorts, owner of Pelican Hill. "Since the day we opened, we've been positioned as a luxury destination resort … when you're targeting the top 5% or 10%, they may not be as affected by the global economy."

Newport's peak tourist season is the summer months, so don't read too much into the strong showing, McCraner said.

"We're doing as good as expected," she said.

The city expected a 10% increase in October, and so far the numbers are panning out, she added.

In Costa Mesa, occupancy was up 13.55%.

In November 2010, voters approved Measure L, increasing Costa Mesa's TOT from 6% to 8%. If the rate had stayed the same, the city would have earned almost $300,000 more compared to last year.

But, when considering the city's higher rate, revenue for the first quarter of fiscal year 2011-12 was up more than 46%. Costa Mesa's revenue went from almost $900,000 for the first quarter of last fiscal year to more than $1.3 million this quarter.

"The summer was very strong, so when we looked at those numbers it was very encouraging," said Paulette Lombardi-Fries, president of the Costa Mesa Conference and Visitor Bureau.

Unlike Newport, Costa Mesa's peak is between January and April, when businesses conferences fill up whole floors of hotel rooms. Lombardi-Fries said the city's best months may yet come.

"We're hopeful," she said.

joseph.serna@latimes.com

Twitter: @JosephSerna