Luxury Hotel Incentive

Transient Occupancy Tax (TOT) Rebate Program 

Approved by City Council in 2018, the City of Temecula offers a Transient Occupancy Tax (TOT) Rebate Program as an incentive to attract new luxury hotels that will generate revenue for the City and create new local jobs.

Updated: October, 2021

Temecula's robust tourism sector brings over 3 million people to the Temecula Valley annually, generating more than 9,000 jobs and results in 1.13 Billion in direct travel spending. To capitalize on the strong tourism and hospitality sector, the City of Temecula has strategically positioned itself to accommodate high quality hotel development within City limits.


This Program is applicable to hotels within City limits that will meet four star or four diamond hotel ratings or higher, under rating criteria established by the American Automobile Association (AAA), JD Power and Associates, or comparable hotel rating entity. Existing hotels are also eligible for the Program. Existing hotels must measurably improve the quality of the hotel to meet current four star/diamond rating requirements

Eligible hotels must have fifty (50) or more rooms and feature hotel operations on a 24 hour per day, 7 days per week basis. The hotel must offer, at a minimum, the following services:

  • housekeeping
  • food and beverage
  • room service
  • banquet and meeting services
  • concierge
  • bell service
  • parking

What is Eligible

Currently, the City has a Transient Occupancy Tax (TOT) of 12% of room revenue, of which, 8% is direct revenue to the City, while the remaining 4 % is remitted to a Tourism Business Improvement District (TBID), administered by Visit Temecula Valley. The Transient Occupancy Tax (TOT) rebate will be no more than 50% of the City’s portion of the TOT (8%) for a fixed period. This agreement will be documented in a binding TOT Rebate Incentive Agreement. Under this Program, the City will temporarily receive no less than 4% of TOT until the TOT Rebate Incentive Agreement expires.  For full details on the Transient Occupancy Tax (TOT) Rebate Incentive Program, click here.