NACOGDOCHES, TX (KTRE) - A new hotel and a hurricane could have had a "make or break" effect on the hotel occupancy tax revenue in Nacogdoches.
A healthy balance remains despite a governor-ordered tax suspension and an economic development tax rebate.
Every hotel guest in Texas is charged a 6 percent hotel occupancy tax. In Nacogdoches, add a 7 percent city tax. A tax exemption came between Aug. 23 and Oct 23 when Texas Governor Greg Abbott suspended the taxes for Hurricane Harvey victims and relief personnel.
"It was the right thing to do," said Jim Jeffers, Nacogdoches' city manager.
The 10 years of tax rebates to The Fredonia Hotel have a bigger impact. The city presented the incentive knowing it was the only affordable way for the investor to open the destination site. Still, city leaders must look at the consequences.
"What the hotel is doing, and it's a concern that needs to be addressed, is that the hotel is displacing people who may have stayed in some of the other hotels and now they're staying in the Fredonia," Jeffers said.
"The Fredonia being here has helped create a little bit of demand because it's the new shiny toy," said John McLaren, the general manager of The Hotel Fredonia.
McLaren said he is confident conventions and business meetings will create enough visitors to fill hotels citywide.
"We're working with the CVB to bring in meeting planners to this community to experience Nacogdoches, so they can go back to their clients and be well spoken about the experience they had in Nacogdoches," McLaren said.
The CVB receives 72 percent of the city's hotel occupancy tax. A new director comes on board in mid-December. The person knows the order. Place heads in beds.
Since The Fredonia Hotel opened in June it has been reimbursed over $29,000 in hotel occupancy tax. Other hotels in that same period contributed just under $262,000 in revenue, a few thousand dollars more than the previous year.
October figures are not yet available.