Coppell has four hotels that are less than 10 years old with a few more slated for, or already under construction, so the city is seeing an increase in HOT revenue after the opening of its first hotel in 2016. Meanwhile, Lewisville’s well-established hotels took a hit during the pandemic but are now seeing an upswing in its revenue, as well.
HOT is the daily hotel or lodging tax paid by travelers staying for fewer than 30 days. Texas law restricts use of revenue to activities that support tourism and the hotel industry. The state assesses 6%, and cities can assess up to 7% in most cases, according to the Texas Comptroller. Both Lewisville and Coppell’s HOT rate is 7%, according to city officials.
James Kunke, Lewisville’s community relations and tourism director, said Lewisville primarily uses HOT revenues for operation of its Visitor Information Center, staffing and activities for its tourism division, special events, and festivals such as marketing initiatives, the public art program and art grants.
Coppell, meanwhile, is using a portion of its HOT revenue to help fund Discover Coppell, which is a new marketing campaign that aims to encourage tourism and draw visitors by highlighting the city’s amenities, Coppell’s Chief Communications Strategist Hannah Cook said.
“It’s really an exciting opportunity to make people aware of all of the great things that Coppell has to offer,” she said. “The hope is that we’ll be drawing tourists to the city of Coppell or visitors to the city of Coppell, and then any dollars that they spend in businesses or restaurants will then come back to the city.”
Coppell’s hotel boom
Coppell has been experiencing a hotel boom over the past five years as the city attracts more developers to the area, according to city officials.
Until 2019, Coppell only had one hotel within city limits, which opened in 2016. Three hotels have opened in Coppell since then, and an additional seven hotels, such as Holiday Inn Express, Homewood Suites and Hilton Garden Inn, are under construction or approved for development.
“We’ve really seen a tremendous growth in the need for hotels in the area. We’re very pleased to have the corporations building here in Coppell,” Coppell Mayor Wes Mays said.
Coppell’s proximity to airports makes it an ideal location for hotels, Cook said. Part of Dallas-Fort Worth International Airport, which Airports Council International lists as the second-busiest airport in the world, falls within Coppell’s city limits; Coppell is also located 20 miles from Dallas Love Field Airport.
The city is also roughly located between Dallas and Fort Worth, which provides easy access to both cities, Cook said. Coppell is situated between two major highways—I-35 and I-635—and large businesses, such as The Container Store as well as Dave & Buster’s, have corporate offices in the city.
HOT revenue in Coppell has increased as more hotels come to the city. The city brought in $307,848.77 in revenue during fiscal year 2017-18; for FY 2021-22 that number more than doubled, totaling $702,987.23, according to city data.
Coppell’s hotel boom is also partly due to city officials’ economic development plan that set out to attract hotel corporations, Coppell’s Economic Development Coordinator Mindi Hurley said.
“[City] Council decided that they really did want to see some hotels in Coppell, because we had gone for many years without a single hotel,” she said. “The desire was not only to have the lodging space, but also to have the meeting space that would come with hotels, so the city did come up with some incentives that they would offer to the hotels in order to attract them here.”
Hurley said city officials offered incentives, such as a hotel occupancy tax rebate, which allows the city to give a portion of hotel occupancy tax funds back to the hotels.
Some of Coppell’s HOT revenue is used to fund the city’s arts programs and organizations, such as the Coppell Community Chorale and Coppell Arts Council, Mays said.
City Council approved funding of $165,000 for Discover Coppell earlier this year. Mays said the city decided to launch the program after seeing a need to bring awareness to Coppell’s unique amenities visitors may not know about, such as the city’s farmers market and parks system.
Mays said the city also felt a need to help local restaurants and businesses attract customers.
“We know that the folks that come in from out of town have a wonderful time here,” he said. “We just thought it was a very appropriate time to start publicizing what we offer here in Coppell.”
Discover Coppell will promote the city as a destination location through advertising, social media and other mediums, Mays said. He said he hopes Discover Coppell will lead to an uptick in the city’s foot traffic and influence people to spend their weekends in Coppell.
“We’re gonna start seeing a little bit more, a little bit broader appeal to some of our local city events,” he said.
Lewisville’s revenue rebounds
While Coppell manages a new hotel base, Lewisville is seeing growth to its established properties both in revenue and renovations.
Lewisville has nearly two dozen hotels, and more are expected to come.
One hotel—Tru by Hilton—is under construction, while construction on an Aloft location with 120 guest rooms is expected to begin before the end of the year. Both hotels will be located in the Vista Ridge hotel district near Music City Mall, where the majority of the city’s hotels are concentrated, Kunke said. An eight-room boutique hotel is also anticipated to be built in Old Town Lewisville after City Council approved plans in June.
Lewisville’s HOT revenue is gradually returning to pre-COVID-19 pandemic numbers, Kunke said. The city brought in $2.2 million in revenue for FY 2021-22, and occupancy rates have consistently been above 70% since March. Occupancy rates in Lewisville were below 60% in 2021 and dipped to 54% in 2020.
Kunke said Lewisville’s rise in HOT revenue can be attributed to the addition of hotel properties as well as strong visitation for youth sports and ecotourism activities, such as the Lewisville Lake Environmental Learning Area.
“We’ve added more things for people to do,” he said. “Our whole area has become more visitor focused, all of North Texas. Also part of it is as hotel rates go up, the hotel revenue goes up.”
Like Coppell, Kunke said Lewisville is an attractive option for lodging because of its central location in the Dallas-Fort Worth metroplex and proximity to major highways. Kunke said guests staying in Lewisville also benefit from lower hotel rates compared to Dallas or Fort Worth hotels.
Lewisville was heavily reliant on business travel prior to the beginning of the pandemic, Kunke said. About 60% of Lewisville’s hotel guests were traveling for work. While business travel has not fully recovered, Kunke said the area’s diverse market has helped the revenue rebound.
“Before the pandemic, because we’re so reliant on business travel, our hotels were busier during the week than on the weekends. That [has] reversed,” he said.
Lewisville’s HOT revenue funds special events, such as the annual Lewisville Western Days and ColorPalooza, the city’s public art program, and art grants, Kunke said.
“As there’s more revenue from the hotel tax, there’s more money to use to promote Lewisville,” he said. “Hopefully it’s a continual cycle. As the revenue goes up, we have more to spend; we use that to bring more people, who generate more revenue.”
To help encourage additional revenue, city officials would like to bring a full-service hotel to Lewisville. A full-service hotel would provide room service, a restaurant, and breakfast, lunch and dinner.
The majority of hotels in Lewisville only provide breakfast, Kunke said. While there is a desire for full-service properties in Lewisville, the hotels are expensive to construct, and not many are being built lately, Kunke said.
City officials are also interested in attracting a larger meeting facility. The Lewisville Convention Center is located in the city’s hotel district at the Hilton Garden Inn, but there is a desire for more space, Kunke said. The 17,000-square-foot facility can accommodate up to 840 guests, and the hotel offers 165 rooms.
“We’ve had groups that have wanted to come here and needed more space or needed more hotel rooms under the same roof,” he said. “So a larger convention-focused property would interest us.”
Lewisville’s hotels are also aging. At least 12 out of 23 properties were built in the 1990s, and at least 16 properties are more than 20 years old.
City officials have worked with hoteliers to ensure hotels remain up to date; 14 have undergone renovations within the last decade, and three completed renovations earlier this year.
Kunke said he expects occupancy rates to continue to climb as business travel recovers.
“We’re already solid in the leisure markets and in the sports markets,” he said. “If it comes back, it’ll push us up in the upper 70s[%], maybe to the 80s[%].”
