AUSTIN, Texas — Staying at a hotel in Austin could cost a bit more in the near future.
City council members signed off on a plan to create a Tourism Public Improvement District (TPID), which would partner with Austin hotels to implement a 2% fee on overall stays.
The 10-year deal could generate up to $390 million in revenue as a result. District 5 Councilmember Ryan Alter said the goal is to use roughly $75 million of that for critical needs throughout the city, such as tackling homelessness.
"Funds from this TPID will be used to spur tourism, but indirectly, it will offset some of our costs," Alter said.
The idea was first proposed in 2020. An agreement finally landed after city leaders raised concerns about where revenue would come from once the Austin Convention Center begins construction in 2025.
"The revenue that would have eventually made it to the city was going to be dramatically decreased because part of that would have gone to the convention center," Alter said. "But if you have no convention center, you have no revenue."
However, 60% of hotels across Austin with more than 100 beds would need to be on board and review the plan before it gets final approval.
Fairmont General Manager Nenad Praporski said he fully supports the partnership and calls it a "win-win" for all.
"We have the ability to roll out that program in due time and in time ahead of the [Austin Convention Center] closure so that we don't feel any effect of the closure of the center or minimize it at the very least," Praporski said.
Praporski also said the agreement comes at a perfect time so that hotel owners can have the time to strategize on how to attract visitors during the closure.
"We'll be able to really increase the marketing power of our destination," Praporski said. "Everybody within the city of Austin will be able to directly and indirectly benefit from."
If hotel ownership groups approve the plan, a board will then be created to manage the funds, according to Praporski.
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