Grapevine OKs hotel tax increase

Hotels in Grapevine will start collecting another cent in occupancy taxes on every dollar starting on Oct. 1.



Grapevine's City Council voted 6-1 to approve an ordinance with the increase at the regular meeting July 15. Place 5 council member Chris Coy was the lone dissenting vote.



Grapevine Convention and Visitors Bureau Executive Director P.W. McCallum said the increase from 6 percent to 7 percent was a necessary step in maintaining enough revenue for the CVB to keep competing in the Dallas-Fort Worth Metroplex tourism market. Because of their spending power, McCallum said the most worrisome competitors are Frisco, Addison, McKinney and Plano—all taxing at 7 percent— and Dallas, Fort Worth, Irving and Arlington—at 9 percent.



"We have no area to provide incentives in our budget," McCallum said. "Otherwise, we would have already been doing that. To that end, we feel that it's very important for us to get back in the game. Not only are we feeling pressure from Irving, Dallas, Fort Worth, etc., in these summer and holiday periods we simply need more dollars to be able to compete there. This 1 percent [provides] a valuable tool to attract new hotel construction."



McCallum said a 7 percent rate is authorized under state statutes, and the city's increase comes with enough available time to educate existing hotels before the start of collection, which coincides with the city's new fiscal year in October.



Additionally, the July 15 vote expands the city's definition of "hotel" to include airport terminals where "minute suites" allow travelers to lodge between the hours of 11 p.m. and 7 a.m. in single rentable time blocks, McCallum said.



"They have what is legally termed an 'overnight,'" McCallum said. "This gives the city an opportunity to collect occupancy tax on that as we do everything else in the overnight occupancy industry."



While Mayor William Tate said he was loath to raise taxes, he did say the majority of such an increase would not directly affect residents.



"This is paid by people coming into our town," Tate said. "And it really seems like we don't have any choice."



Councilwoman Sharron Spencer moved to approve the ordinance, with Darlene Freed issuing a second.



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