Jennie Quinlan was one of the first Airbnb hosts in San Antonio when she opened up a room in Alta Vista. Photo by Gretchen Greer.
The City of San Antonio generated over $2 million in Hotel Occupancy Tax (HOT) revenue for the year 2021 from about 2600 short-term rental properties. Credit: Gretchen Greer for the San Antonio Report

Hotel occupancy tax revenue from short-term rentals in San Antonio rose for the third year in a row, even as overall revenue from the tax dropped more than $40 million in the first year of the pandemic.

City officials projected in August that San Antonio would collect $57.6 million in fiscal year 2021 in hotel occupancy tax revenue, slightly higher than the $52.1 million it collected in 2020, but still down almost 40% from 2019, when it pulled in $93.5 million.

Short-term rental taxes make up just a small percentage of the total hotel occupancy tax collected, but that percentage has grown steadily, from $1.3 million in 2019 to $2.1 million this year, city officials said.

Like the rest of the hospitality industry, hotels were significantly impacted by the coronavirus pandemic. But demand for short-term rental continues to climb, part of a global preference for short-term rentals over traditional hotels as people begin traveling once more, according to Denver-based short-term rental data agency AirDNA.

“Right now, we have about 2,600 active [short-term rental] accounts,” Deputy Chief Financial Officer Troy Elliott said.

As tourism recovers in the midst of the coronavirus pandemic, City Council on Thursday approved a one-year extension contract with Seattle-based Host Compliance to manage permitting and tax collection from homeowners who rent their properties out through short-term rental companies like Airbnb and VRBO. 

Development Services Director Michael Shannon said he hopes the one-year extension will give the city enough time to transition its short-term rental management entirely onto Accela, software that currently handles all of the city’s permits.

“We’ll see how this year goes,” he said. “We’re doing our work now to not need another [Host Compliance contract] extension.”

City Council first passed an ordinance regulating short-term rentals in 2018, requiring rental operators to obtain permits and pay a hotel occupancy tax to the city.

Host Compliance has worked with San Antonio since the city first began regulating short-term rentals, Shannon said. The contract extension approved Thursday runs through Dec. 20, 2022.

Host Compliance provides a one-stop platform for people who operate short-term rentals, he said. People can set up accounts with the Development Services Department to get permitted and pay their hotel occupancy tax via Host Compliance, all in one place.

Host Compliance also monitors short-term rental websites for the city, combing each platform for listings in San Antonio. If there are discrepancies between what Host Compliance finds online and the registry of rentals the city has, the department reaches out to people who are not permitted, Shannon said.

“We’ve educated and brought into compliance several short-term rentals,” he said. “And others have shut down because they were operating illegally and didn’t know, or just didn’t set it up and so they quit the business.”

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Jackie Wang

Jackie Wang covered local government for the San Antonio Report.