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Hotel tax waiver after Harvey could mean decreased revenue for city

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Governor Abbott extended a waiver on the hotel and motel occupancy tax for displaced storm victims and first responders. Governor Abbott extended a waiver on the hotel and motel occupancy tax for displaced storm victims and first responders.
The city depends on HOC tax revenue to promote tourism, maintain beaches, and support local attractions. The city depends on HOC tax revenue to promote tourism, maintain beaches, and support local attractions.
HOC tax revenue for this year was projected at $25 million, and the City Council may opt to supplement the budget with reserves if the Governor's waiver leaves too big of a gap. HOC tax revenue for this year was projected at $25 million, and the City Council may opt to supplement the budget with reserves if the Governor's waiver leaves too big of a gap.
City officials say long-term it is important that damaged hotels like Port Royal (pictured here) are able to re-open by spring so the city does not lose out on HOC tax revenue. City officials say long-term it is important that damaged hotels like Port Royal (pictured here) are able to re-open by spring so the city does not lose out on HOC tax revenue.
CORPUS CHRISTI -

After Hurricane Harvey, it is hard to find a hotel room in Corpus Christi. They are all booked. Normally that would mean a lot of hotel tax revenue coming into the city, but that not the case right now.

After the storm, Governor Greg Abbott waived the hotel and motel occupancy tax for 14 days for victims and first responders. Now he has extended the waiver to 30 days, meaning the city will not see that a lot of that revenue for a full month. 

The HOC tax provides funding for promoting tourism, beach maintenance, and local attractions, including places like the Art Museum and the Botanical Gardens. 

Although Corpus Christi hotels are fully booked for the most part, the rooms are not being taken by typical tourists. 

"Most of the people that are filling up these hotels are somehow related in the relief effort," said Eddie Houlihan, Director of Management and Budget for the City of Corpus Christi. 

Those first responders, like displaced storm victims, are not paying hotel occupancy tax as long as Governor Abbott's waiver is in effect. It began on August 23rd, and was extended until September 22nd. 

This year the hotel occupancy tax was expected to bring $25 million into Corpus Christi, according to the Convention and Visitor's Bureau.

"If we are unable to generate the money we have in the past, it will have an impact," Houlihan said, adding the absolute worst case scenario could mean budget cuts for the things the HOC tax supports.

There are some saving graces. The waiver comes after peak tourist season. Some hotels, like the Omni, say half of their guests are regular business. 

Additionally, when people use FEMA vouchers to stay in hotels, those vouchers cover the HOC tax. 

Paulette Kluge, CEO of the Convention and Visitor's Bureau, also says having full hotels, especially after peak tourist season, helps the situation.

"The clean up is going to take a long time," Kluge said. "I think we'll continue to see some rooms from FEMA vouchers, some rooms from insurance adjusters, some rooms that wouldn't be here normally."

Regarding the long-term, Houlihan says the focus is ensuring hotels are ready again by spring.  For instance, Port Royal is a huge tax revenue contributor for the city, but now heavily damaged by Harvey, the hotel is not accepting any guests. 

"That's what we're really concerned about, that we're unable to get everything back the way it was by spring break next year," Houlihan said. 

As for the month of September, the city and the CVB will know the financial impact of the Governor's waiver when hotel occupancy numbers come back this November.  From there, the City Council might opt to supplement the budget with reserves.

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