San Antonio Inches Toward New Hotel Lodging Fee

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The entrance to Hotel Emma. Photo by Scott Martin.

Scott Martin for the Rivard Report

The SATPID plan calls for the City to collect 1.25 percent of each overnight hotel stay at participating hotels.

City Council’s preliminary approval on Thursday put local tourism and lodging representatives one step closer to creating a new lodging fee before the end of the year.

It’s a move industry professionals say would place San Antonio in league with other Texas cities when competing for leisure visitors, meetings, and conventions. Visit San Antonio is tasked with that job, and has been working with the San Antonio Hotel and Lodging Association to develop the San Antonio Tourism Public Improvement District (SATPID) service plan.

“We’ve done a lot of legwork, we’ve done a lot of homework. We’ve had a lot of input from hotels to help us with bringing forward a strong contract for the city … so we’re excited about moving forward,” said Liza Barratachea, president and CEO of the Hotel and Lodging Association. “It’s really historic for our industry, and it’s a huge day.”

The SATPID plan calls for hotel guests to be charged 1.25 percent of each overnight hotel stay at assessed hotels as a fee that would be taxed at the existing Hotel Occupancy Tax (HOT) rate. The funds the City would collect from the SATPID fee would be used to provide marketing and promotion services that benefit the hotels within the district and the industry as a whole.

Hotels with 100 or more rooms would be eligible to be included in the citywide district. The plan excludes short-term rentals from the fee.

With Thursday’s preliminary approval of the SATPID ordinance, Visit SA and the Hotel and Lodging Association will now begin the process of obtaining the required 60 percent of hotel owners’ signatures on a petition to support the effort.

At a City Council Workforce and Development Committee briefing earlier this month,  Justin Holley, chairman of the Hotel and Lodging Association, told committee members the group is confident it will be able to collect the needed signatures. That number is estimated at 95 total, Barratachea said Thursday.

San Antonio’s tourism industry has an estimated $13.6 billion annual economic impact that brings approximately 30 million visitors every year and supports more than 130,000 local jobs with an annual payroll of $3 billion.

But demand for San Antonio hotel stays has grown only moderately in the last eight years, according to reports from Visit SA and the Hotel and Lodging Association. In addition, San Antonio’s market share in room-night demand within the state has declined while other major Texas cities, especially those with bigger marketing budgets, have experienced growth.

Visit SA’s annual marketing budget has remained flat at $20 million for several years. The SATPID could deliver another $10 million in funds to promote San Antonio, bringing it in line with other cities in Texas and across the nation.

Tourism Public Improvement Districts (TPIDs) are commonly found in California cities and within several other states, and have already been adopted in Dallas, Fort Worth, and Arlington.

The Dallas TPID assessment is 2 percent and is expected to generate $15 million annually to promote the city as a tourist destination. Its HOT rate is 7 percent, atop a 6 percent state hotel tax.

San Antonio’s HOT rates are the same as Dallas, but with an additional 2 percent for convention center improvements and 1.75 percent for Bexar County. Visit SA receives 35 percent of the 7-percent City HOT for its annual budget to promote tourism.

According to a timeline presented at that meeting, the petition and service plan will be presented to City Council for ratification in the coming months, and if approved, the eight-year SATPID agreement would go into effect in October.

A SATPID Corporation Board would then provide direction to Visit SA on its sales and marketing programs.

12 thoughts on “San Antonio Inches Toward New Hotel Lodging Fee

  1. Excellent reporting. Thank you for covering this important program and industry.

    This is the Future of Tourism and the financial success of Visit San Antonio

  2. Do the Short Term Rentals pay the HOT rate, 6 percent state hotel tax, the additional 2 percent for convention center improvements and 1.75 percent for Bexar County? Since this is the future of tourism and STR’s are filling a void, I would expect that industry to participate.

    • Susie, short-term rentals are not included in the current plan. City Council is tackling a STR ordinance separately.

    • All STRs should be paying local and state HOT, but there is currently no mechanism to enforce it. The forthcoming ordinance may address that.

      • STRs advertised on Travelocity/flipkey, Arbnb, VRBO, HomeAway all identify location by google map. Property location and tax payment are easy to identify and enforce. Currently some do and others do.

  3. The industry is slick. You get quoted a nightly rate without taxes and other fees. People have just come to accept any additional taxes a city would like to impose. At some point there will be a way for consumers to evaluate hotel taxes and then make a decision on where they would like to stay. These taxes are a gold mine for the bureaucrats who are paid from these funds and who are basically unaccountable for any of their actions. Tell me how you will determine if the additional taxes are paying dividends. How are you assessing if previous taxes are paying dividends. Hold people/entities accountable with your reporting.

  4. This is another government rip-off
    Do not allow these people to convince you this will increase your business
    It will increase their tax income
    San Antonio already has a very large tourist influx
    Don’t do tyhis

  5. This is a great idea! Tourist will not be bothered by this slight increase in the final bill…also, it gives us an equal chance to compete for tourist. Every major city in the country has certain fees on hotel stays. I know, because I have travelled all over this country and have paid the extra fee. Great move on the part of our City. VisitSA needs this extra tool in our marketing kit.

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