Will Austin’s Convention Center Expand? Good Question, Says City Task Force

May 10, 2017

For the past several months, the city's Visitor Impact Task Force has been exploring new uses for the millions of tax dollars brought in by Austin hotels. The group also has to contend with a host of state and local regulations that govern how exactly the money can be spent.

Revenue from Austin’s hotel occupancy tax must go toward efforts that promote tourism, the hotel industry and the convention and visitors bureau. The city estimates that revenue to top $90 million this fiscal year

Much of the conversation at a task force meeting Tuesday centered around one big-ticket item: whether the task force should officially recommend an expansion of the Austin Convention Center. Task force member Ashwin Ghatalia wondered how that proposal would affect the city’s bottom line.

“The question is, if we get a larger venue, would the cost and the losses be larger?” Ghatalia said. “That’s a concern to me -- that we can create a very large venue and, yet, find out that we need more resources in order to make sure it works.”

For now, there’s no clear consensus on what the task force’s recommendation to the Austin City Council will be. Many members have voiced support for the plan, which calls for funding the expansion through a 2 percent increase of the hotel occupancy tax. 

Several others say they could support the expansion with some conditions, and a few members outright oppose it. Tom Noonan, president of the Austin Convention and Visitors Bureau, noted that, over the years, increases in Austin’s hotel tax revenue have been in line with expansions of the convention center. Basically, more people are staying in Austin’s hotels, and one can presume that a significant portion of that tourism comes from convention-goers.

“I’m not saying the center’s responsible for all of that, but we became a convention destination because we built a center, and hotels got built downtown, and all this happened,” Noonan said.

Task force members also weighed in on a potential funding tool that the city has yet to tap into, what’s known as a tourism public improvement district. The tourism PID  is an additional fee that’s tacked on to hotel bills, with the funds going to marketing the city as a tourism destination. Scott Joslove, president of the Texas Hotel and Lodging Association, told task force members that the tool could help the city fill a bigger convention center.

“It frightens us quite a bit if we did a convention center expansion without a tourism PID from the standpoint that you can’t just build it, you need to build it and market it and incentivize the business that comes,” Joslove said. “So our goal is to hopefully try to see both of them happen.”

With several considerations still on the table, the group is nearing its deadline to issue recommendations to City Council. The final task force meeting is scheduled for May 23.