Thursday, May 13, 2021 by Chad Swiatecki

Tourism Commission recommendations include gondolas funded by hotel tax

A transit system geared toward tourists, paying Austin musicians to promote local tourism, and a variety of programming and promotional efforts for historic sites are among a new batch of recommended uses for the city’s Hotel Occupancy Tax dollars.

This week the Tourism Commission unanimously approved a report from its Parks and Environment Working Group that looked at how the city could spend hotel tax money in ways that benefit the local parks system. The 16 recommendations, which all appear to fall within the state laws covering use of the tax, include promotional guides for area parks and related attractions, programming and other content that could be used in media placements, and visitor centers or informational kiosks for a variety of attractions and sites in the parks system.

While the hotel tax has long been an attractive pool of money for local uses, it’s equally problematic because the state limits its use to four areas – convention center expenses, cultural arts funding, historic preservation, and tourism and marketing promotion – with spending caps on some of those categories. The working group was created last February to look for ways to address some parks needs so that the budget for the Parks and Recreation Department and parks-related nonprofits could be directed toward other expenses.

Although hotel tax receipts have dropped drastically since the onset of the Covid-19 pandemic, they are expected to rebound within the next five years to previous levels in which more than $100 million was collected annually.

After voting to adopt the report, the commission also voted unanimously to ask City Council and staffers to consider the recommendations during annual budget negotiations, specifically when deciding how best to allocate hotel tax dollars in ways that comply with state law.

There was some debate among working group members about how widely to interpret the state’s language allowing for the creation of a transportation system to move tourists to and from hotels “in and near the municipality.”

The approved recommendation language reads: “Proposed projects in this category include a tourist transportation system (e.g., a shuttle, bus route, ferry, gondola, or other transportation system that does not primarily serve the general public) for transporting tourists between hotels, commercial areas and tourist attractions (e.g., Zilker Park or Barton Springs). While the general public could use such a tourist transportation system, HOT tax funding would be limited to the extent that tourists use the tourist transportation system.”

Commissioner Michael Cannatti, who led the working group, said the city hasn’t capitalized on the allowances offered in the state law.

“Some of these categories the city does not take full advantage of, one of which is a visitor information center, which under state law can be put in place in parks to help orient people and provide information to tourists,” he said. “This was a way of explaining to Council, here are ways and areas that are suitable for hotel tax funds to be deployed in compliance with state law.”

In considering the pair of motions related to the recommendations, Chair Catlin Whitington said he hoped the language directed at Council and staffers would prevent the report from being overlooked during budget work sessions in coming years.

Commissioner Ed Bailey called the recommendations some of the best work produced since the recent creation of the Tourism Commission. Prior to voting for both motions, he said he didn’t want the commission to be asked to rank or prioritize the possible projects as a follow-up request from City Council.

“I want to make sure we don’t somehow end up in a process downstream where we’re trying to value-engineer all of these to see which ones are the highest priority,” he said. “As we’re moving forward to adopt this whole platform as a part of utilizing HOT funds … this doesn’t bounce back to this committee to determine wayfaring signs versus a transportation system and which is more deserving of money.”

Photo made available through a Creative Commons license.

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Key Players & Topics In This Article

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.

Tourism Commission

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