Council urged to use HOT funds creatively

Using Hotel Occupancy Tax dollars to promote local sporting events is just one example of how the Odessa City Council can become more creative when using HOT funds to promote tourism, two state tourism experts told council members during a virtual workshop on Thursday.

Workshop presenter Justin Bragiel, general counsel for the Texas Hotel Association, said Odessa is already doing a great job of promoting the arts, but HOT funds can be used for so much more.

“You can be creative when using Hotel Occupancy Tax dollars but it must directly promote tourism, conventions and the hotel industry,” Bragiel explained.

Two ideas Bragiel pitched were using hotel tax dollars to promote collegiate or amateur sporting events and provide hotel guests free transportation to the city-owned conference center or various tourist attractions in the city.

The key is to make sure the idea, such as promoting athletic events, is able to make an economic impact at least equal to what is being spent, Bragiel said.

The workshop on the Hotel Occupancy Tax dollars was held to help familiarize the four new council members elected last year with how the funds can be used, workshop moderator Randy Ham said. Ham is executive director of Odessa Arts.

Several veteran council members said they found the workshop to be a good refresher course.

Councilwoman Detra White was intrigued by the possibility of using HOT funds to promote local sporting events, such as soccer or baseball tournaments.

The City and the University of Texas Permian Basin are currently trying to negotiate a new 25-year agreement that would allow local sports leagues to continue using athletic facilities currently located on the UTPB campus. Part of the negotiations is trying to find funding to improve and expand current facilities and encourage out-of-town visitors to stay overnight and spend more time and money while in Odessa.

“The HOT workshop is always beneficial to clarify the appropriate use of these funds,” said White, who was elected to council 2 years ago. “The promotion of tourism and arts is the standard.

“But the presentation also mentioned money can be used towards the maintenance and improvement of our new convention center. New information was also provided on the potential use of HOT funds to promote tournament-type sports on UTPB and city facilities.”

HOT dollars are collected from guests who stay at hotels, Bragiel explained. Tax rates can range from 13 to 17 percent at Texas hotels. Odessa hotel users pay about a 15 percent tax rate.

Hotel tax revenues are considered restricted funds, which means it can only be spent to promote tourism.

The previous city council was harshly criticized by some residents and several city council candidates running for office last year after it voted to use HOT dollars to purchase two large Christmas Trees for a total of $80,000. The trees were erected at the entrance to the Marriott Hotel, which is connected to the city-owned conference center.
Workshop presenter Ann Graham, executive director of Texas for the Arts, said most communities, including Odessa, use hotel tax dollars to fund art-related projects because art is instrumental in promoting tourism.

Ham said in some cases HOT funds can be used even if not directly promoting people to stay overnight at a hotel.

For example, Odessa Arts uses HOT funds to pay the West Texas Jazz Society to perform every Saturday at the Marriott. The event qualifies for funding because the performances often encourage hotel guests to extend their stay and buy drinks or dinner while watching the jazz performance.

“The hotel still benefits even if people don’t spend the night,” Graham said. “There are different ways for the arts to express themselves.”