City officials want to put a new fee and increase the current tax rate on hotel stays.
The Memphis City Council will get its first look Tuesday at a two new ordinances that would generate new revenues for tourism and $50 million renovations to the Cook Convention Center by increasing costs on hotel owners.
• One ordinance would create the “Memphis Tourism Improvement District,” effective January 1, 2016 through December 31, 2025. A new $2 fee per room night would be imposed on hotels in the district. It was not immediately clear if the district has certain boundaries or if the new fee would apply to all Memphis hotels.
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The fee would not apply to hotels inside established Tourism Development Zones, or for complimentary rooms, or on a person who maintains the occupancy of a hotel room for more than 30 days.
Revenues collected from the district would go to the Memphis Convention and Visitors Bureau [CVB] for “destination marketing.” This means advertising Memphis tourism on the Internet, on television, radio, and in print. The funds would also fund the creation of promotions like package deals and contests and fund tourism market and industry research.
“The district funds shall be used to generate awareness of an increase visitation to the city,” the proposed ordinance reads. “The programs will be designed to to increase hotel room sales for the benefit of the assessed hotels.”
Of course, the fee could be passed to the consumer. But if it is, the city wants the hotel owner to report it.
The ordinance claims the new fee has the support of the Metropolitan Memphis Hotel and Lodging Association.
• The council will also consider nearly doubling the current hotel/motel occupancy tax rate.
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The current rate is 1.7 percent of the cost of the room night. The new tax rate would be 3.5 percent.
The new funds will be used for $13 million in renovations to the Cook Convention Center.
Revenues from the original tax rate (1.7 percent) will fund the overall $50 million renovation of the Cook Convention Center.