Vic Patel, CEO and director of operations and revenue of San Marcos-based Haven Management Services, sent a letter on April 11 to city officials asking for financial relief for the industry, which, according to Patel’s letter, has seen a 65% drop in business in March and expects a decline of 80% both in April and May, compared to 2019 numbers.
“Yes, the hotel industry in San Marcos has been overlooked,” Patel told Community Impact Newspaper in an email. “We have almost no income coming into our properties to pay employees and fixed debt. Many cities, I’m sure, are starting the process as hotel rooms in the U.S. are empty amid the coronavirus pandemic.”
San Marcos Mayor Jane Hughson said she read the letter from Patel and spoke to him.
"Staff and the council are working together to review the information provided to determine what additional opportunities may be feasible for small businesses," Hughson said in an email.
Patel and his family have been in the hotel business in San Marcos since 1999. Haven Management Services owns and operates the Holiday Inn Convention Center, Holiday Inn Express, Country Inn & Suites and Candlewood Suites and employs 120 of the approximate 1,000 hospitality and hotel employees in the city.
The San Marcos hotel industry counts on customers from several sources affected by closings, including events and overflows from the San Marcos Convention Center, corporate events and travel, sports travel, Texas State University and tourism to the San Marcos Premium Outlets.
Patel, in his letter to city officials, thanked them for passing an ordinance on April 7 to waive late fees and penalties on city hotel occupancy tax payments due on April 20, May 20 and June 20. But he called the response “barely adequate” in the letter and said it “does not go nearly far enough to support the vast majority of hospitality businesses who are in the eye of the storm.”
Patel pointed to the city of Buda, which offered hotels in good standing with the city “up to $5,000 in forgiveness for deferred hotel occupancy tax payments” with an “aggregate of $45,000 available for hotel tax forgiveness,” according to the letter.
The city of Buda on March 20 deferred hotel occupancy tax payments for March 20 and April 20 for 60 days. In addition, on April 7, Buda City Council voted for the forgiveness program as part of its Still Budaful Stimulus Plan.
“[The] city [of San Marcos] has deferred [hotel occupancy tax] late penalties for three months, but has provided no other relief, tax breaks, rebates or incentives to the hotel industry,” Patel told Community Impact Newspaper.
The financial relief request
Patel’s letter, on behalf of his company’s hotels and 26 total hotels in San Marcos, asked the city to consider the following:
- "City of San Marcos to enact a hotel occupancy tax emergency payment deferral and forgiveness plan similar to the city of Buda. City of San Marcos to consider deferring all hotel occupancy tax payments for March 20 and April 20 and May 20 for 90 days. The city of San Marcos should agree to revisit the hospitality industry’s situation in late June to see if any additional extensions are needed."
- "City of San Marcos to consider decreasing energy per usage rates for 90 days. Maybe there is a short-term solution for a 90-day period to help our hotels retain staff and stay in operation."
- "City of San Marcos to change the late penalty to what the city of New Braunfels has enacted in January 2020. We believe the city of New Braunfels is charging a $50 late payment past the 21st of each month."
- "City of San Marcos to work with Hays County to keep 2020 property tax rates 60 percent lower than 2019 on all hotel and accommodation establishments. We anticipate the hotel and accommodation establishments will see a drop in revenue of 60% at a minimum due to the coronavirus outbreak. We understand we will have to reassess the evaluations 6 months after he COVID-19 outbreak is over when we see total damage compared to 2019."
- "City council to consider a moratorium for all new hotels or permits for 2 years on any new hotel development within the city of San Marcos city limits until the industry stabilizes."
Patel asked city leaders for a meeting to discuss the requests.
Hughson said the city has never enforced a moratorium on hotel permits and the "Texas Local Government Code is very specific in the justifications for moratoriums on development.
"This usually requires evidence that the new development would cause overcapacity of municipal infrastructure or would be detrimental to the public health, safety and welfare in the affected geographic area," Hughson wrote in her email.
Hughson said the goal is for the city to continue to work collaboratively with the San Marcos Chamber of Commerce and the Greater San Marcos Partnership in assisting small businesses with resource opportunities, "contacting businesses and providing information on our websites detailing financial resources available to them, as well as what services they continue to offer to the community during this difficult time.
"We appreciate the benefits of our local small businesses and the entrepreneurship that is a basic Texas principle," Hughson wrote in her email.