Data center workers drive record hotel tax revenue in Cedar Rapids
Cedar Rapids is experiencing record hotel tax revenue, largely attributed to workers constructing data centers in the area. This increased revenue helps fund local amenities and non-profits.
Cedar Rapids is seeing a significant increase in hotel tax revenue, primarily driven by construction workers involved in data center projects. This surge in tourism dollars is helping to fund local amenities such as Brucemore and the NewBo City Market, which received $30,000 in funding in 2025.
The city receives a 7% tax on every hotel stay, which is then distributed among non-profits and contributes to the general fund. This year, the city projects a 40% increase in hotel-motel funding compared to the previous year, marking a record high since before the pandemic. Hotel occupancy in Cedar Rapids hit 68.7% this past spring, a nearly 10% increase from 2025 and 14% since 2024.
City Finance Director Abhi Deshpande confirmed that a portion of this increase is directly linked to data center projects. He expects this hotel-motel tax windfall to continue growing over the next five years, aligning with the construction timelines for the QTS and Google data centers in the area. These data centers are described as long-term developments and investments.