Cornell study shows how tax reform could boost hospitality investment


WASHINGTON (April 3, 2024) – The Tax Relief for American Families and Workers Act of 2024, H.R. 7024, could provide substantial tax relief to hotels across the country, incentivizing investments in renovations and property upgrades, according to a Cornell University study commissioned by the American Hotel & Lodging Association.

The study, conducted by Cornell’s Center for Hospitality Research, highlights how hotels of all sizes and service levels stand to benefit from H.R. 7024’s provisions to extend 100% bonus depreciation and expand deductibility of business interest. The bipartisan bill to temporarily extend these provisions passed the House in January and is now pending in the Senate.

Temporarily restoring 100% bonus depreciation incentivizes investments on qualified improvements. As one example, according to the study, a hotel that made a $2.75 million investment in qualified commercial kitchen equipment could be eligible for more than $175,000 in additional tax relief under H.R. 7024.

Temporarily expanding business interest deductibility provides additional tax relief. The study outlines a range of tax relief scenarios, sampling 25 hotel properties of different sizes that could benefit from the bill, including:

  • Nine hotel properties with up to 150 rooms would see tax relief ranging from $17,000 to nearly $500,000.
  • Nine other hotel properties with more than 200 rooms but less than 500 rooms would see tax relief ranging from $37,000 to $1 million.
  • Seven properties with more than 500 rooms would see tax relief ranging from $600,000 to nearly $6 million.

“The bipartisan tax package would help hoteliers invest in renovations and upgrades to stay competitive and improve the guest experience. This means more jobs, employee benefits, and economic growth,” said AHLA Interim President & CEO Kevin Carey. “This study is proof that the bill would help hoteliers navigate the economic challenges created by persistent inflation, a nationwide workforce shortage, and an aggressive federal regulatory agenda. On behalf of America’s nearly 62,500 hotels, we call on the Senate to pass the bipartisan Tax Relief for American Families and Workers Act as soon as possible.”

View the study here.