Tourism industry leaders Wednesday pledged to join conversations about and efforts to address San Antonio’s homelessness problem in the future, but maintained that using money tourists pay through a new hotel fee is not the long-term answer to fund homeless services. Most City Council members agreed that the money should be used as originally intended: to support marketing efforts that increase visitors to San Antonio.
Council will consider the eight-year Tourism Public Improvement District (TPID) agreement during its meeting Thursday. Councilman Rey Saldaña (D4) said he wants Council to delay the vote in order to consider other options, but according to statements made by his colleagues, it seems unlikely he will get a majority to agree.
Since September, Saldaña has been floating the idea around City Hall to direct 20 percent of the TPID fee to Haven for Hope’s budget. Industry leaders and most Council members balked at the idea earlier this week, saying it’s too late to make changes to the proposal and Saldaña’s suggestion would unfairly single out the hoteliers and tourists to fund homelessness solutions. Most encouraged a broader conversation about how to mitigate homelessness and fund those efforts.
“Am I singling out the hotel industry?” Saldaña said at a City Council briefing Wednesday. “I don’t think that’s the case. I think what I’m doing is calling on an industry that hasn’t been supportive to the level that others have on this issue.”
The audience, many hoteliers and other industry members, audibly sighed in disagreement. Hundreds of hotel owners and brands contribute to numerous charities locally and nationally, San Antonio Hotel & Lodging Association President and CEO Liza Barratachea told City Council earlier. “They all have a different charity,” she said.
It is possible to ask tourists to help pay for issues such as homelessness instead of asking local businesses and taxpayers, Saldaña continued. “I think you can do that while still being competitive with any other city.”
City Chief Financial Officer Ben Gorzell said the intent of the TPID is to create, not supplant, funding for the marketing efforts of Visit San Antonio (VSA) in order to allow spending levels similar to those of other Texas cities. VSA launched a membership program last year as part of its effort to match other cities’ growing tourism bureau budgets; San Antonio’s is roughly $25 million, while Houston’s is $35 million, Dallas is at $37 million, and Austin is at $20 million.
The fee revenues, an estimated $10 million annually, isn’t going into hotelier pockets, Barratachea said. It’s a “self-assessed fee” on their own customers, she added, “[they are] taking a risk in hopes that Visit San Antonio is going to boost revenue and boost demand for the industry but also will benefit the whole entire city.”
Visitors also contribute to sales taxes, which goes into the general fund, said Casandra Matej, president and CEO of Visit San Antonio. The nonprofit will manage the TPID with oversight from a newly created board of hoteliers for the district.
“If we’re successful in driving visitation to San Antonio, it not only benefits the industry – it benefits the greater community,” Matej told the Rivard Report.
Barratachea has said her industry group would “absolutely” work with the City on a citywide effort to address homelessness.
“We know that homelessness impacts our industry,” she said, “and we are more than wiling to be at the table. … We’ve committed to every single Council member that we are [ready and willing] to being part of the solution.”
The TPID is expected to generate revenue by charging a 1.25 percent fee per night to hotel guests staying in hotels with 100 or more rooms. About 65 percent of the 163 eligible hotel owners signed onto the TPID agreement with the understanding that the money would be used by Visit San Antonio – the former city department that became a private nonprofit in 2016 – for marketing and sales initiatives, industry partnerships, research, and administration.
If any changes were made to the initial funding agreement, which was approved by City Council in June and used to collect the signatures, the San Antonio Hotel & Lodging Association would have to again go out and collect those signatures – a scenario industry representatives do not welcome.
The tourism industry has been working for nearly two years on this initiative, Councilman Clayton Perry (D10) said. Council should not back out of the deal now, he said, “I’d say not only no, but hell no.”
The Texas Organizing Project (TOP), a progressive advocacy group, sent a letter to City Council on Wednesday, urging a delay of the vote.
“If we want to continue marketing and demonstrating the best San Antonio has to offer, what does it say about us when we cannot ask a billion-dollar industry to support our most vulnerable, while they increase their budgets,” wrote Michelle Tremillo, executive director of TOP.
“The truth of the matter is homelessness is a citywide issue, and we all need to be concerned about it and working toward solutions and I am confident that the visitor industry feels the same way,” Mayor Ron Nirenberg told the Rivard Report Wednesday morning. “We just have to make sure that we don’t conflate issues and breach our own contractual obligation. … Diversion of funds needs to be done very carefully in any circumstance.”
Saldaña’s request has initiated a conversation about how to sustainably fund Haven for Hope and other homelessness initiatives, Nirenberg said, and he has directed City staff to work with Visit San Antonio to identify funding recommendations that Council can review early next year.
After speaking with City attorneys this week, Councilman Roberto Treviño said he found a possible compromise for funding for homelessness by using revenue from the Henry B. González Convention Center to spend on homelessness projects.
City Attorney Andy Segovia said that proposal will be further clarified and presented as part of other funding options next year.
He’s glad that the conversation is happening in the public eye, Saldaña said. “I hope that tomorrow we continue this momentum – that we care about homelessness and want to find funding mechanisms.”