Proposed Hotel Tax Would Benefit All of San Antonio

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Hotel Valencia Tower at 150 East Houston Street. Photo by Scott Ball.

Scott Ball / Rivard Report

Hotel Valencia would one of many downtown hotels gleaning revenue for tourism marketing under the proposed San Antonio Tourism Public Improvement District.

No matter where I am in the world, when I tell people I am from San Antonio, they reply with some variation of, “I love San Antonio. Everyone is so nice, and the hospitality is second to none.”

Most likely, these people were touched by someone working in San Antonio's travel and tourism industry.

In 2017, that sector had a $15.2 billion economic impact on San Antonio. This often misunderstood industry is filled with complicated ownership and brand structures, vast career opportunities, and dynamic people who strive to continually impress with their attention to detail, knowledge of budgets, thoughtful analysis, and infinite generosity.

To many of them, San Antonio is hospitality.

The River Walk, Alamo, Missions, and countless Mexican restaurants are second nature to San Antonians, and perhaps that is why people who don't work in hospitality industry rarely consider its effects on the city. However, more than 140,000 local residents, or one in seven, work in the hospitality sector, which is responsible for a $3.2 billion annual payroll.

While the sector is strong and has grown with our flourishing city, Visit San Antonio, the public-private partnership that promotes local tourism, has seen a relatively flat marketing budget in the last seven years. In that same timeframe, the industry has seen stagnant hotel occupancy rates and a significant loss of market share to other Texas cities. Flat growth in the local industry means reduced revenues from sales, alcohol, hotel, and property taxes.

The first step in the strategy for boosting the marketing budget at Visit San Antonio, formerly the Convention & Visitors Bureau, was its transformation to an independent organization when it separated from the City in 2016. With a goal of being able to better respond to market demands and create opportunities to grow sales and marketing budgets, City Council tasked the lodging industry with finding additional revenue sources to help ensure this new entity's success.

To meet that commitment, the San Antonio Hotel & Lodging Association (SAHLA), as the representative of the hotel industry, has been working for almost two years to establish the San Antonio Tourism Public Improvement District (TPID). After months of town hall and one-on-one meetings, City Council in June gave preliminary approval for a proposed service plan that would allow hotels to add a “pass-through” fee assessment of 1.25 percent to room rates for hotels with 100 or more rooms.

The assessment is projected to add $10 million in funding to Visit San Antonio’s sales and marketing initiatives to increase demand by attracting more conventions, group meetings, and visitors to the city. The effect of boosting tourism would be seismic for virtually every corner of San Antonio as the hospitality industry supports our community in ways many residents are unaware of.

While there is the obvious contribution through the hotel occupancy tax, the peripheral effects that benefit residents through career opportunities and significant contributions to local sales, alcohol, and property taxes often go unnoticed.

In 2017, the industry contributed $214 million in taxes and fees to the City of San Antonio and $419 million to all local governments, plus more than $95 million for local school districts, $33.9 million to VIA and Advanced Transportation District, and $29.6 million annually to other taxing entities. Approximately $20 million went directly to local arts, culture, and historic preservation.

According to a U.S. Travel Association study, the revenue generated by tourism and hospitality helps keep property tax rates down. If not for the hospitality industry, the average homeowner in San Antonio would be liable for an additional $1,000 annually in local property taxes.

Additionally, hotels within the Central Business District contribute approximately 60 percent of overall funding to the Downtown Public Improvement District, which is administered by Centro San Antonio. Funds from the Centro PID pay for a multitude of services and amenities for the downtown area including early morning patrol and Centro ambassadors who work to keep downtown welcoming to employees and visitors alike. Centro PID resources also are allocated to fund Haven for Hope outreach personnel, effectively doubling the staffing of “on the street” counselors who work one-on-one with the homeless population.

Countless San Antonio hotels partner with nonprofit organizations – such as Boysville, Catholic Charities, the Children’s Miracle Network, and the San Antonio Food Bank – to contribute volunteer hours, clothing, bedding, towels, food, and furniture as well as monetary and in-kind room night donations – just think of all the hotel stays you see at silent auctions.

Both small lodging operators and some of the biggest convention center hotels undertake hundreds of charitable initiatives every year. Collectively, SAHLA’s charitable program Angel Buys since 2005 has provided more than $500,000 in financial support to more than 30 local charities, including the San Antonio Police Officers Association’s Blue Santa Program, Boys and Girls Club, Family Support Center, Haven for Hope, and more.

SAHLA has led the proposed creation of a TPID because we believe this industry-driven initiative can be integral to strengthening Visit San Antonio’s ability to market our city as a destination. With the growth in local hotel occupancy tax and sales tax revenue from an increase in tourism, San Antonio will not only see added jobs, but also increased funding for our community’s arts, culture, and historical preservation, programs, and facilities.

While often misunderstood, the tourism and hospitality industry is critical to the economic health of San Antonio. To us, San Antonio is hospitality.

 

4 thoughts on “Proposed Hotel Tax Would Benefit All of San Antonio

  1. Improving San Antonio as a tourist destination with additional funding is smart because that is what we are and what we are good at. Homelessness is to important of an issue that I believe it needs it own focus and efforts. Let’s use these new Hotel & Lodging fees for their intentions – Marketing San Antonio.

  2. “…the industry has seen stagnant hotel occupancy rates and a significant loss of market share to other Texas cities.”

    So what’s the plan? Let’s raise the hotel tax to the highest in the nation. Meeting planners will love it. Tourists, yea they don’t mind.

    This article glazed right over the eventual rate…18%/per night.

    Sorry to be so cynical. SA needs to find ways to be more competitive, not less.

  3. That’s all we’ve been doing my entire life, since the Hemisfair was salvaged: improving downtown. We’ve passed bonds, had special elections, and also authorized hotel and motel taxes. And we the people do support downtown. Last time I tried to book a convention in here, the waiting list was over 10 years.
    I don’t believe we have a problem that requires more tax. I think we have a leadership deficit, or someone in accounting isn’t putting it all on the table with transparency. Lets review an operating statement and break it down so even the slowest among us can understand it.

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