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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.