San Luis Obispo brought in a record $11.4 million in Transient Occupancy Tax during the 2025 fiscal year, according to the city’s General Plan Annual Report, and officials say that money is going directly back into the community.
Transient Occupancy Tax, or TOT, is a 13.5% tax applied to visitors’ hotel bills when they book overnight stays in the city. The 2025 total marked a 4.6% increase over the 2024 fiscal year, with average hotel occupancy climbing to just over 70%.
Tourism and Community Promotions Manager Jacqui Clark-Charlesworth says residents benefit directly from that revenue.
“That TOT is going directly back into our general fund which helps pay for all the amazing things that sometimes we can take for granted, like you know, new bridges, paved streets, access to open space and trailheads, fire, police and safety, all that,” Clark-Charlesworth said.
The growth came even as new hotels opened in the city during the last fiscal year. Matt Wright, General Manager of Hotel Cerro, says demand held strong across seasons that don’t always perform well.
“We found the spring and fall to be busier than we anticipated, in addition to our summer. But even in months like January, we had a lot of demand as opposed to previous years,” Wright said.
The benefits of increased tourism aren’t limited to the hospitality industry. Hollie West, Director of Communications for the SLO Chamber of Commerce, says visitor spending ripples through the broader local economy.
“Visitors are coming in here, staying at our hotels, spending money at our businesses in the city, really bolstering local restaurants, local shops, and that spending goes right back into our pockets,” West said.
West says the majority of visitors come from within California, with airport connectivity also playing a growing role in driving tourism.
“Our main demographic, geographically, coming here is actually California travelers. And then to a large extent, the flights that land at the SLO Airport, we saw a larger uptick in the destinations that the SLO Airport flies to,” she said.
Looking ahead, the city says the current 2026 fiscal year is already trending in a positive direction.
“We track TOT by month, and we are having a great year so far. It’s on a fiscal year July to June. So far in 2026, we are trending up in the city of SLO about 6% to last year,” Clark-Charlesworth said.