San Marcos Hotels Look At Relief Options During Pandemic

By Terra Rivers | Managing Editor

While the COVID-19 pandemic continues to hold most of the nation in lockdown, San Marcos’s hotel owners and managers are looking to the future and the recovery ahead.

The industry has come together to look at how to address recent economic downturn and is asking the city for help.

Vic Patel, CEO and Director of Operations and Revenue of Haven Management Services, has submitted two letters to city officials asking for financial relief.

Patel’s first letter, dated March 19, was directed to the San Marcos City Manager, Bert Lumbreras.

Patel said the industry has seen a 50 percent decline in occupancy in the month of March and projected a 60 percent decline in April.

The industry is asking the city to consider four items to provide financial relief to the local hospitality industry.

1. Change the late penalty for City Hotel Occupancy Tax Payment to what the City of New Braunfels enacted in January 2020
2. Waive Penalties for Utility Payments for the remainder of 2020
3. Work with Hays County to keep 2020 Property Tax rates 35% lowers than 2019 on all Hotel and Accommodation Establishments
4. Decrease energy per usage rates for the Hotel Industry
5. Consider a moratorium for all new hotels or permits on any new hotel development for two years within the City of San Marcos

On April 11, Patel sent another letter to the City Manager and included the Mayor and all council members requesting for financial relief.

Patel said the hotel industry in San Marcos employs an estimated 1000 people.

Patel and his family own the Holiday Inn Convention Center, Holiday Inn Express, Country Inn & Suites and Candlewood Suites.

“We had 120 employees in Feb. 2020 before the crisis,” Patel said.

On April 7, the City of Buda adopted multiple economic relief measures, which allots approximately $485,000 to small businesses. 

The Buda’s small business taskforce recently created the “Still Budaful Stimulus” Program which provides financial assistant to small businesses through three different grant programs: Still Budaful Stimulus Grant, Emergency Co-Marketing Grant and the Hotel Occupancy Tax Forgiveness Program.

The Hotel Occupancy Tax Forgiveness program grants qualifying local hotels a deferral of hotel occupancy tax payments to the city for March 20 until April 20. The program also provides local hotels up to $5,000 worth of hotel tax payment forgiveness.

Prior to the Coronavirus epidemic, the City of Buda established a Hotliner Incentive Program, which allows incentives for all eligible hotel tax expenses under the state law according to the city.

The eligibility for the Hotliner Incentive Program depends on the percentages of hotel tax revenue paid in the previous fiscal year. 

The City of New Braunfels has waived all late fees for Hotel Occupancy Tax payments. Properties will be charged 15 percent of the assessed taxes after 90 days past due.

During their April 7 meeting, the San Marcos City Council passed an ordinance to temporarily waive the 15 percent late charge and 1 percent per month interest rate for delinquent payment of Hotel Occupancy Taxes.

The waiver only applies to hotel occupancy tax payments that first become due on April 20, May 20 and June 20.

The City of San Marcos’s total budget for Fiscal Year 2020 is $239 Million; of the total budget, hotel occupancy tax operating revenues contribute $2.6 million or 1.09 percent.

According to the FY 20 Adopted Budget Document, Hotel occupancy tax is considered a special revenue fund that is legally restricted to expenditures for specified purposes.

The Texas State Tax Code states that Hotel Occupancy Tax revenue can only be used to promote tourism and the convention and hotel industry.

Mayor Jane Hughson said she has read Mr. Patel’s letters and spoken with him; the staff and city council are working together to review the information provided to determine what additional opportunities may be feasible for small businesses.

“We appreciate the benefits of our local small businesses and the entrepreneurship that is a basic Texas principle,” Hughson said. “The City has been working with both the San Marcos Chamber of Commerce and the Greater San Marcos Partnership assisting 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.”