City Task Force Weighs Using Hotel Tax Revenue for a Convention Center Revamp

Mar 1, 2017

With more tourists coming to Austin each year, the city’s hotels are generating more and more revenue. Some of that funding is set aside to support Austin’s tourism industry, and as the number of guests and hotels grow, so does that pot of money. A city task force is exploring new ways to spend it.

Austin’s hotel guests are taxed 15 cents on every dollar of their bills. This fiscal year that revenue is expected to surpass $90 million. Some of that money goes to the state. The rest goes toward supporting the Austin Convention Center, the Austin Convention and Visitors Bureau, and the Cultural Arts Division.

At a meeting Tuesday evening, the city’s Visitor Impact Task Force brainstormed how that money could be used in new ways. One issue that is clearly at the top of everyone’s minds is the proposed expansion of the Austin Convention Center.

After a brainstorming session, city staffer Larry Schooler read off some of the group’s initial ideas.

"Expand convention center, consider and decide on whether to expand the convention center, and if yes, how to fund [an expansion]” Schooler read.

Board members also proposed finding ways to direct funds toward parks and historic sites. For the past few years, Austin’s hotel tax revenue has been growing by double digits. That prompted District 8 Council Member Ellen Troxclair to float the idea of using it for other facilities affected by tourism, and the task force is charged with exploring those ideas.

Tom Noonan, president of the Austin Convention and Visitors Bureau, said it’s important to consider that the recent growth in revenue could level off.  

“I would tell you that I don’t think that’s sustainable long-term,” Noonan said. “So, I hope I’m wrong. It could be awesome if we’re seeing 13 percent more every year. That’d be incredible, but I don’t think that’s really the case. We haven’t asked the people who are paying the tax what their thoughts are.”

Board members agreed to hear from members of the hotel industry before making final recommendations on how to spend the money. During public testimony, the board heard from multiple speakers who supported the idea of a convention center expansion. Some others sought alternative uses for the revenue, including Bill Bunch with the Save Our Springs Alliance, a nonprofit that works to protect the Edwards Aquifer and its system of springs.

“Most of our parks, like Barton Springs, have historic and cultural value,” he said, “so we could be getting a two-for-one benefit” if we spent the money on preserving things that are under threat.

The task force didn’t weigh in on the merits on these proposals Tuesday. It plans to issue recommendations to city council later this spring.