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Tuesday, January 22, 2019 by Chad Swiatecki

UT study at center of debate on tourism, hotel tax and expansion proposal

A forthcoming report from a group of University of Texas architectural students may be the next significant piece of research shaping the ongoing debate over how the city uses its Hotel Occupancy Tax funds.

That study – commissioned last year for the UT School of Architecture’s Center for Sustainable Development – was directed to look at the possible scenarios and market dynamics for a proposed expansion of the Austin Convention Center. It is expected to arrive in front of City Council members next month, though the professor in charge of the project told the Austin Monitor on Monday that the only action currently planned is a briefing to Council on or about Feb. 11, with many details still unclear.

The study was one of many pieces of research discussed at the most recent meeting of the city’s Tourism Commission. The meetings have been embroiled in heated debate over the convention center, its impact on local tourism and how much its business contributes to HOT revenue creation.

The proposed $600 million expansion, which would be paid for using a portion of HOT revenue that annually hits $100 million, is the centerpiece of Mayor Steve Adler’s “downtown puzzle” concept that would help generate funds for homelessness relief and an assortment of other priorities.

Last week’s Tourism Commission meeting saw no non-procedural action taken, and followed what’s become a common script: tourism and related-industry professionals advocating to expand the center they contend can’t keep up with demand, arguing over how to parse tourism data with commissioners pushing for HOT funds to be used in other ways.

Mark Tester, director of the convention center department for the city, took criticism from some commission members after his presentation, which explained that the center gets a total count of unique visitors attending multi-day events like South by Southwest, but doesn’t get “turnstile” daily attendance figures from those events because it is typically proprietary.

Tester said the incompleteness of that data makes it difficult to get a clear picture of how many people the center draws, and how many of those visitors are tourists who would book tax-generating hotel nights. He said daily estimates are compiled by combining data on unique attendance, area parking rates, plates served, vendor sales and totals for media and other guests.

“I’d love something more tangible. There’s no methodology to understand how many people are coming in on a daily basis,” Tester said. “Visit Austin does a comprehensive analysis, and forecasted numbers and estimates are close and probably within 10 percentage points.”

Commissioners John Riedie and Michael Searle, two frequent critics of the proposed expansion, said convention center leaders should be able to clearly show both the amount of tourism created by the facility, and the amount of new business and room nights that would result from adding more meeting space.

Riedie also questioned estimates from the late ’90s that said the 2003 expansion of the center would result in more than 800,000 visitors by 2005 – far less than the estimated 540,000 annual visitors currently – and expressed doubt that current forecasts would hold up if an expansion is undertaken.

“We’re trying to get real numbers here. There’s a raft of academic research that shows over-investment in convention centers is bad public policy,” he said. “We spend so much more promoting our convention center and convention business than any city I’ve found. You guys are saying all kinds of stuff without backing it up.”

Commissioner Scott Joslove, president of the Texas Hotel & Lodging Association, said it’s unlikely critics of the convention center can be swayed, no matter how much data the commission is given.

“It’s clear we have a contingent on this commission that feel the convention center gets a disproportionate portion in the amount of funding, and that they don’t have the requisite impact to merit that level of funding,” he said. “We can spend hours and hours at these meetings trying to discredit the convention center, discredit the (convention and visitors bureau), challenge all their numbers and go into high-level discussion of what was the basis of this, and what was the basis of that? We’re not moving the ball forward at all in terms of long-term recommendations in terms of what we can use the hotel tax (for) under existing laws.”

Photo: Non-dropframe at English Wikipedia [CC BY 3.0].

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Key Players & Topics In This Article

Austin Convention Center: This city department operates the downtown convention center and associated events.

Hotel Occupancy Tax: A tax on the rental of a room in a hotel or other rental properties (including apartments) that cost 6 percent of the cost of a room.

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