New Tourism Commission to advise on hotel tax funds, issues related to $9B industry

Austin’s tourism industry will get some additional City Hall oversight as City Council prepares for budget workshops that are almost certain to include decisions on how to spend the quickly growing reserve of Hotel Occupancy Tax funds.

Council voted 8-1-2 Thursday – with a no vote from Council Member Jimmy Flannigan and abstentions from Council members Pio Renteria and Delia Garza – to establish the 11-member Tourism Commission, which is being pushed to hold its first meeting by the end of August.

That timeline was the subject of some tense debate between Flannigan and Council Member Ann Kitchen, the resolution’s co-sponsor, with Flannigan saying commissions he has helped to form since joining Council were occasionally left to languish and wait for appointees from other Council members.

The commission will be an advisory body that will weigh in on the use of HOT funds, infrastructure and investments related to tourism, promotion of tourism attractions and studies related to any plans to expand the Austin Convention Center.

A 2017 study from the Perryman Group, an economic analysis firm, found that Austin’s tourism industry generated $9.1 billion in gross product in 2016. Much of that figure leads to the more than $100 million that the city receives from its share of the Hotel Occupancy Tax, with those funds required by the state to be spent on tourism-related expenditures.

Flannigan also argued, with some support from Mayor Steve Adler, that the often complex nature of tourism spending and the laws covering the issue bring about a need for industry experts on the commission in addition to Council-appointed members. Flannigan proposed an amendment to add 10 such members, from bodies such as the Downtown Commission, Airport Advisory Commission and Arts Commission, but that amendment was defeated 5-6 because of concerns that having 21 members would make it difficult to convene a quorum.

“Twenty-one people is too big and unruly, and I think it’s going to be difficult for a number of people who are already serving on other commissions to also dedicate the time they are going to need to serve on this one as well,” Council Member Ellen Troxclair said.

Kitchen said the importance of cultural attractions such as Barton Springs and the Broken Spoke, along with the city’s music and arts communities, to the area economy make it necessary to have a city body responsible for monitoring tourism-related issues. Oversight of the industry was one of the recommendations of the city’s Visitor Impact Task Force, which met in early 2017 to discuss issues related to historic preservation, use of HOT funds and more.

Council Member Leslie Pool said she hopes the commission can provide insight into the use of city funds by Visit Austin, the group formerly known as the Austin Convention and Visitors Bureau. Pool has frequently criticized the group for slow and incomplete responses to requests for its budgetary information.

“Knowing the large amounts of money that flow in through the Hotel Occupancy Tax from our visitors, it’s really important that we tie the work that is done with the convention center and the visitor’s bureau much more closely to this dais,” she said. “We have lacked that level of oversight and connection for a really long time, and I am really grateful we are making the change.”

Previously, Pool and Mayor Pro Tem Kathie Tovo requested an audit of Visit Austin, along with an analysis of how peer cities review and oversee their analogs to Visit Austin. That audit will be completed this week and is on the agenda for the next Council Audit and Finance Committee meeting.

In response to Pool’s criticism, Visit Austin President and CEO Tom Noonan emailed the Austin Monitor: “We take our work and responsibility very seriously as hospitality is the third largest industry in Austin, employing more than 125,000. Transparency and accountability are paramount to Visit Austin. We have over 10 years of clean financial audits, located on our website available to the public, and have recently completed a performance audit. We have been open with city council regarding any and all requests made to our office and providing briefing materials to council for every budget cycle. Last year, Visit Austin adopted new spending guidelines after council recommendation – we note as well that all previous spending was fully authorized by state law and a well-accepted industry practice. We have offered a position on our Board of Directors to a member of City Council in addition to the Assistant City Manager currently on our Board. We look forward to continuing our important work and working collaboratively with council and staff.”

Photo by Mwyzykowski0821 [CC BY-SA 4.0], from Wikimedia Commons.

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