Council Approves New Hotel Fee, Pledges to Tackle Homelessness

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Bonnie Arbittier / Rivard Report

Councilman Rey Saldaña (D4).

City Council voted 10-1 Thursday to create a new fee for hotel guests in San Antonio. Councilman Rey Saldaña (D4), who cast the lone vote against the measure, proposed delaying the decision in order to give Council time to consider allocating a percentage of the fee to mitigate homelessness.

A vote in favor of the fee is not a vote against helping the homeless population, Councilman Manny Pelaez (D8) said. "That's a false binary choice."

Each Council member pledged to participate in broader discussions about how to find long-term, sustainable revenue sources to fight homelessness – as did tourism industry representatives.

On Jan. 1, the Tourism Public Improvement District (TPID) will start collecting a 1.25 percent fee per night from guests staying in hotels with 100 or more rooms. The eight-year agreement is expected to raise more than $10 million annually, which will largely be used for marketing and advertising that supports the tourism industry.

It's a badly needed boost to Visit San Antonio's budget, according to nearly a dozen hospitality leaders that testified before Council on Thursday, to stay competitive with other cities.

The budget for Visit San Antonio, the former city department charged with promoting tourism that became a private nonprofit in 2016, is roughly $25 million, while Houston's is $35 million, Dallas' $37 million, and Austin's $20 million. The bulk of those funds come from the 16.75 percent hotel occupancy tax (HOT).

More than 100 of the 163 eligible hotel owners signed on in support of the tax, representing nearly 75 percent of hotel property tax value, said City Clerk Leticia Vacek, who officially verified the hotelier signatures Thursday.

Hoteliers are taking a "calculated risk by imposing a fee on our guests," said Kevin Latone, chairman of the San Antonio Hotel and Lodging Association (SAHLA), which led the effort to establish the TPID alongside Visit San Antonio. SAHLA estimates a seven-to-one return on investment for hoteliers.

The economic impact of the city's tourism and hospitality sector – the third-largest industry in San Antonio – in 2017 was $15.3 billion, according to a recent study, an increase of $1.6 billion over 2015.

One reason Council did not support the seemingly "last-minute" suggestion by Saldaña to divert funds to Haven for Hope or other homelessness initiatives, was because the TPID is more than two years in the making and Council already gave preliminary approval for the plan as-is in June.

"My mistake was not really learning about the scope of the TPID until after we [approved it on] June 21," Saldaña said, explaining that it was not his intention to take resources away from the tourism industry, but to help grow it and help solve homelessness at the same time. "I thought we could thread the needle and do two things at once."

Most Council members and Mayor Ron Nirenberg said they appreciated that Saldaña brought attention to the issue of homelessness in the process. It is possible to have both a competitive tourism industry and a sustainable plan for homelessness, Nirenberg said.

Homelessness is directly linked to tourism, Councilwoman Ana Sandoval (D7) said, adding that it is not "unheard of" for Council to modify proposals the day they are approved.

"It's pretty rare that this kind of opportunity comes forward" to directly fund homelessness with tourist dollars, she said. HOT revenue comes with strict spending guidelines from state statute – supporting nonprofits or initiatives that tackle homelessness is not a legal use of those funds. "[But] it's a very valid point that our timing was not ideal," Sandoval said.

This week, Nirenberg called for City staff to work with the tourism industry and other sectors to identify possible revenue streams to support initiatives aimed at tackling homelessness.

Saldaña, whose last term on Council concludes in about six months, said he hopes effective action comes of that work.

"We have to be more intentional than just talking about the solutions," he said, adding that organizations need money and resources. “We know what the solutions are … we don’t need to recreate the wheel."

10 thoughts on “Council Approves New Hotel Fee, Pledges to Tackle Homelessness

    • No it maxes it out as many other cities in Texas have. If the monies collected already actually went to the purpose of promoting tourism, and if the state wasn’t cutting the overall ad budget for the state in half, this wouldn’t be necessary.

  1. Recognize that if you rent a room ( 100 beds+) you are paying close to 20% in tax. Am I wrong?
    Anyway, homelessness needs to be addressed in another forum/revenue generating source.

  2. The single greatest driver for bringing people out of poverty is stable housing. Build affordable housing and enact policy that really boosts it. I guess single payer housing could work as well.

  3. San Antonio certainly needs solutions and leaders with a heart to address our forgotten neighborhoods and homelessness.
    Attention to the drug and crime epidemic in our low income communities would be a start. Free drug intervention programs, job training and job placement would help many with these problems improve their lives.

    Time for action and not just pushing the issuses down the road. Time for the mayor and city council to stop turning a blind eye on these problems and taking serious action to fund and seriously address these problems. Time to provide real help to our forgotten communities and not just the city hall insiders like the Visit San Antonio.

    Want real improvement in these communities? Address the drug epidemic and most crime will go away.

    Help people help themselves with job placement and job training. Help with affordable house too.

    • >>Want real improvement in these communities? Address the drug epidemic and most crime will go away.<<

      Agree. The only definitive way to address illegal drug selling IS … wait for it … DEATH PENALTY. Forget about momma crying about her innocent, misguided son. DEATH PENALTY. Get rid of the scum, PERMANENTLY. Tired of spending money on other so-called solutions that suck away our taxes. DEATH PENALTY FOR SELLING DRUGS.

  4. We need a task force to interview people as they leave SA. The tax is already a HUGE shock to people when they check out of their hotels. HUGE! I know folks that come here on business, that say they would never come here for vacation. They feel “ripped off”.
    Homelessness is a huge issue, but should not be added to our visitors bill.

    • No Gov help for the homeless. It only encourages more homelessness. First rule of economics: whatever you subsidize you get more of, and whatever you tax you get less of. Mercy is the role of individuals and churches/religious organization/nonprofits… NOT THE GOVERNMENT.

  5. Tell the average tourist that we now have the highest hotel tax in the United States and they will change their vacation plans. Tourists will get a city that does not even keep downtown crosswalks freshly painted and sidewalks that are cluttered with sc00ters running over them as they try t0 navigate our parks and Riverwak! SA is killing a golden goose!

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