With tourism at a low, most hotels and motels in the area are hurt financially, and the city is looking to provide support through rebates.
The Seguin City Council unanimously approved a resolution Tuesday during a regular meeting for a one-time hotel, motel tax rebate program along with a payment arrangement for past due tax receipts following a motion by council member Mark Herbold and seconded by council member Chris Rangel.
“[Hoteliers] penned a letter to the mayor and a couple other city officials asking for assistance,” Seguin Main Street Director and CVB Director Kyle Kramm said. “Based on that letter, the city reviewed how we best could assist them and what we could do legally. So the rebate was an option that we could actually accomplish and make happen.”
The HOT (Hotel Occupancy Tax) rebate will include 13 locations from around the area, Kramm said.
Those locations will receive an amount based on the HOT collected in the fiscal year of 2019, ranging from anywhere between $1,000 to a $5,000 return, a memo provided to the council read.
The $40,000 in total allocated funds for the rebate will come from the CVB Building Fund, which was created several years ago to purchase a standalone visitor center. The decision to use those funds was made because it has seen little to no contributions since its inception and could better be used to help save the local hospitality and tourism industry, Kramm said.
“A standalone visitor center is something that’s probably years off in the future if it ever does happen,” he said.
To receive the rebate, participating hotels must have paid the first quarter HOT by April 30 or enter a payment plan with the city with 25% of the first quarter HOT payment due in three intervals.
The first payment is designated for May 29, followed by a second payment on June 30, a third on July 31, and a final payment on Aug. 31.
If a location fails to meet the 25% payments by the designated dates, it will receive an additional 1.5% penalty applied to the balance. If the businesses cease to operate within the next year, they must repay the rebated funds.
A handful of the hotels to receive the rebate also qualify for the Seguin Strong Stimulus Program that was discussed earlier in the meeting, Kramm said.
“Some of the hotels are not gonna be small businesses because they’re owned by corporate or et cetera,” Kramm said. “But some do qualify for both, and we’re going to be taking that into account when we’re looking at the small business grants of what other assistance has this entity received from the city. But they could still be potentially eligible for assistance.”
Kramm said hotels and motels in the area have seen as much as a 65% decrease in occupancy since the new coronavirus reached the county’s doorstep.
“Normally things slow down in the winter and then around spring break things pick back up, and they normally stay pretty busy until August,” Kramm said. “Now is the time of the year when they’re normally 60% occupied during the week and about 80 to 90% occupied on the weekends. They’re now sitting at about 25% occupied.”
Locations that applied for the rebates will receive the funds later this month, Kramm said.
“We really want to make sure that our business community remains strong and that we’re showing the importance to Seguin of how important they are,” Kramm said.