By Chris Shadrock
Every time someone checks into a Boerne hotel or stays at the nearly 100 short-term rentals, they are helping the City provide important services that are rooted in our community’s pride and identity.
Since 1976, the City of Boerne has collected a Hotel Occupancy Tax, often called the “bed tax,” which is placed on the rental of rooms in hotels, motels, and other lodging establishments. This tax is collected from guests who stay in these accommodations for less than 30 days.
“The State of Texas has a very detailed process for how HOT funds can be utilized,” Director of Visit Boerne Larry Woods said. “It is for projects that promote tourism and bring people from outside the community to your town.”
The key advantage of the Hotel Occupancy Tax is that it doesn’t place a financial burden on residents because it is paid by tourists and visitors, not by the people who live in the city. But residents can enjoy the benefits of the revenue.
“Events that are part of our community’s identity are funded, in part, by these HOT funds,” Woods said. “Enhancements to our Christmas holiday events and other family fun activities receive support when visitors come and stay in Boerne.”
Criteria 1: “Heads in Beds”
Any spending must directly promote tourism and the hotel industry by attracting overnight visitors. The idea is that these funds should help increase the number of people staying in local hotels, thereby generating more tax revenue.
Criteria 2: The Nine Qualifying Categories
Spending must fall into one of the nine specific categories allowed by Texas law:
- Visitor Information Centers: Funds can be used to establish, improve, or maintain a visitor information center or convention center.
- Convention Registration: Costs related to facilitating convention registration, like hiring extra staff, providing welcome bags, or offering transportation for convention attendees.
- Advertising and Promotion: At least one-seventh of the total HOT funds must be spent on advertising and promoting the city to attract tourists.
- The Arts: Support for the arts, including music, dance, drama, and other creative expressions, but only up to 15 percent of the total funds can be used for this purpose.
- Historical Restoration/Preservation: Funding for restoring or preserving historical sites that attract tourists.
- Sporting Events: Cities in counties with populations under one million can use funds to promote or support sporting events.
- Sporting Facilities: Some cities can use funds to enhance or upgrade sports facilities.
- Transportation Systems for Tourists: Funding for transportation that specifically serves tourists, such as shuttles between hotels and tourist attractions.
- Signage: Creating signs that direct tourists to key attractions within the city.
In the City of Boerne, these funds help promote long time events such as the Hill Country Mile Rod Run and the Texas Corvette Association’s Open Car Show, but not the City’s annual fireworks show. All three draw large crowds, but only the first two bring people to Boerne and support our local economy via hotel bookings, dining, and retail.
Furthermore, the Visit Boerne Advisory Board meets publicly every quarter to advise the Visitors Center and recommend which events will receive funding to help advertise their events.
Additionally, the City utilizes its funding to fully operate the Boerne Visitors Center. The team of four is the primary entity helping get Boerne and all it has to offer in front of people. In 2023, 161,000 visitors stayed in a room at one of the City’s hotels or short-term rentals and generated nearly $16.5 million in revenue for hoteliers and STR owners.
Most visitors come from within the state, as Houston, Austin, and Dallas/Fort Worth are the City’s top three drive markets to Boerne. In accordance with state law, the Visitors Center must advertise more than 50 miles away from our destination.
“It is a common misnomer that people have about how our outreach works,” Woods said. “Luckily, if you already call Boerne home, you know how wonderful and special this community is, but every day we work to promote our community to our neighbors across Texas.”
That promotion is paying off, with each overnight guest in a Boerne hotel spending on average an additional $105 a day on dining, transportation, and retail, which amounts to $11.7 million annually in incremental sales. Combined with the hotel revenue, Visit Boerne helped bring $28.2 million into the Boerne economy in 2023.
The success of the team has not gone unnoticed. Assistant Director Jeanette Teague has been teaching a class on the subject for four years.
“The Hotel Occupancy Tax is a powerful tool that allows cities to boost tourism and support the local economy without taxing residents,” Teague said. “But the rules, as administered by the state are crystal clear, and by understanding the specific rules and categories, communities can ensure that the money collected from visitors is used effectively to enhance the city’s appeal and bring in even more tourists in the future.”
The City of Boerne is far from alone in collecting HOT funds. Fredericksburg, New Braunfels, and Bandera all participate, and across the state 354 Texas cities collect HOT funds.
A recipe for success in Boerne for nearly 50 years, with no signs of slowing down.
