Councilman Michael Reyes gives initial approval to new hotel fee to fund tourism promotion

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San Antonio Councilman Michael Reyes took one step Thursday toward enacting a new fee paid by hotel guests that officials say is necessary to stay competitive with tourist destinations.

Reyes gave preliminary approval Thursday to a “tourism public improvement district” that would cover the entire city and charge hotel guests a fee calculated at 1.25 percent of their room rate at hotels and lodging facilities with more than 100 rooms. Council members unanimously approved the proposal without debate.

The new funds — an estimated $10 million a year — would go toward promotion and marketing efforts for the city’s $13.6 billion tourism industry and put San Antonio’s tourism advertising budget on par with cities like Houston, Dallas, Nashville, Chicago, Denver and Orlando.
Officials with the San Antonio Hotel and Lodging Association and Visit San Antonio, the former Convention and Visitors Bureau contracted by the city to promote San Antonio to travelers, have backed the measure — arguing San Antonio’s 130,000-employee hospitality industry is losing ground to Houston, Austin and Dallas as the city’s marketing dollars stay flat.
Now, supporters of the proposed district must gather signatures from more than 60 percent of San Antonio’s hoteliers in order to gain final council approval. There are about 350 hotels throughout the city.

A final council vote is expected in mid-September, with the district projected to launch in October.

Visit San Antonio’s budget is about $25.5 million, behind Houston’s $35 million and Dallas’ $37.2 million but ahead of Austin’s $20.2 million. Last year, Visit San Antonio started a membership program for local hotels, attractions and restaurants that’s expected to add another $1 million to the organization’s coffers.

San Antonio’s total existing tax rate on hotel stays is higher than it is in Austin and Dallas — 15 percent in each city — but lower than in Houston, which stands at 17 percent.

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