Tourism industry in Round Rock, Pflugerville and Hutto showing recovery following COVID-19 shutdowns
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Local tourism and the travel industry are recovering from the setbacks caused by the COVID-19 pandemic – a trend that is reflected in skyrocketing tax revenues in the region’s cities.
At Round Rock and Pflugerville, business and tourism strategies drive hotel tax revenues and local economic growth, albeit from slightly different sources.
Sports and family tourism are driving Round Rock’s growth, while business travel in Pflugerville has spurred an increase in hotel room nights, according to local officials.
“Overall, we definitely see an improvement in the industry than COVID[-19] Restrictions are lifted. More and more people want to get out and do something, ”said Nancy Yawn, Round Rock Convention and Visitor Bureau Director.
City officials attribute Round Rock’s explosive rebound and tourism revenue growth to the opening of the Kalahari Texas Resort in November 2020.
Located across from Dell Diamond on East Palm Valley Boulevard, Kalahari brought 975 additional hotel rooms, meeting rooms, and entertainment to Round Rock.
Regarding Pflugerville, Amy Madison, executive director of Pflugerville Community Development Corp. said that the increase in hotel nights is mainly due to business travel, which is being driven by the city’s proximity to Austin Executive Airport.
“It has less to do with entertainment and more to do with business,” said Madison. “That helps bolster the numbers … we had COVID before[-19] [hotel stays]- earlier, faster and faster. “
Definition of hotel tax revenue
Hotel occupancy taxes are paid by a guest staying in a hotel, bed and breakfast, or other accommodation option. Taxes include a city and state component, with state hotel taxes being levied for accommodations that cost more than $ 15 per day and local hotel taxes for accommodations that are more than $ 2 per day for less than 30 days, according to the Texas Comptroller Office.
At Round Rock, the city documents state that the price is combined with a local tax that goes to the Round Rock Sports Center.
The revenue generated directly from hotel tax on the city’s 4,542 hotel rooms is a less significant source of income than sales tax, but it is used to fund programs and services that support tourism-assisted facilities are widely used by both.
City officials say that if people stay in Round Rock, they will be spending money in the community and the revenue from sales and mixed drink tax will stay on-site.
The income from the hotel tax may only be used for the direct promotion of tourism and the congress and hotel industry in accordance with state law. In 2020, that revenue represented around 1% of the city’s proposed budget, according to the city.
Texas law requires cities to invest local revenue to promote tourism and promote hotel stays. City documents state that the upkeep of venues that are part of Round Rock’s Sports Capital of Texas Sports Tourism initiative and a strategic goal of being the Texas Sports Capital is earmarked for these funds.
Venues include Dell Diamond, Round Rock Sports Center, and Round Rock Multipurpose Complex, and the city’s arts and culture division of communications and marketing.
At least 5% of the city’s hotel tax revenues fund the Round Rock Arts and Culture Department, the city said.
“That helps with the infrastructure and [to] Add Services, ”said Sports Tourism Director Chad McKenzie. “[It] keeps property taxes low. It’s a big boost to what we’re doing. She employs many of our citizens here and pays their salaries. We are really trying to continue with this and do even better than it was before the pandemic broke out. “
Meanwhile, Pflugerville officials are using the hotel tax revenue to sponsor events like the German Pfest and to pay incentives for the Courtyard Austin Pflugerville and Pflugerville Conference Center under the Chapter 380 tax treaty, according to city documents.
Local trends
Before the COVID-19 pandemic restrictions began in 2020, tourism revenues in Round Rock, Pflugerville and Hutto had been rising for at least five years. Hotel and event tax revenue increased by between 1% and 5% annually from 2017 to 2020, as data from all three cities show.
City data shows the impact of COVID-19 on travel, and certain tourism-driven businesses are reflected in a 31.47% decrease in hotel tax revenue in Round Rock – nearly $ 2 million less in 2020 than in 2019.
In 2021, however, hotel and event tax revenue increased 126.83% year over year from $ 4.1 million to $ 9.3 million – an increase city officials largely attributed to the opening the Kalahari.
In Pflugerville, officials said 2016 was the first year the city began collecting hotel tax revenues and has seen steady growth since then until the 2020 COVID-19 pandemic forced travel closings.
The current estimate in Pflugerville for hotel tax collection in 2021 is $ 370,000, which puts the city close to where it was before the pandemic.
Pflugerville Mayor Victor Gonzales said SH 130 has helped the city develop as the need for hotels, restaurants, shopping, and entertainment increases.
“The toll roads, both [SH] 45 and [SH] 130 [have] was the economic and growth boom for Pflugerville, ”said Gonzales. “We [have] become more of a regional community than anything else. “
The city of Hutto also saw hotel tax revenue grow 11.94% from 2020-21.
Kristi Robich, community outreach and program manager for the city of Hutto, said via email that the return of large local events in 2021, which were canceled in 2020 due to COVID-19, had helped the recovery.
For example, according to Robich, the local KOKEFEST event brought 20,000 people to Hutto this summer.
“While the tax revenue for hotel occupancy in Hutto has increased in 2021 compared to 2020, as in most municipalities there is still scope to recover from the pandemic,” said Robich.
The Sports Capital of Texas • and the Kalahari Effect
In addition to traditional tourism in Round Rock, city data showed that sports tourism saw increased activity compared to the previous year. The main job of the sports management and tourism department, according to a city website, is to program, plan and maintain sports facilities and implement the city’s long-term tourism plan.
McKenzie said event attendance is “going back to normal” as major sporting events resume at venues like Dell Diamond, Round Rock Sports Center, and Round Rock Multipurpose Complex.
A September press release from the city’s Department of Sports Tourism said the industry has generated $ 110 million in economic activity for the city since 2014.
City data shows that sports tourism-driven economic activity hit an all-time high in 2019 when Round Rock’s strategic goal of providing quality sports facilities in a conveniently located area resulted in net income of $ 23.6 million. •• “We’re working with a consultant to see what next we could bring to Round Rock in our sports tourism activities,” said McKenzie.
Aside from income from sporting events, project leaders said the Kalahari opened last year in circumstances far from what was expected when project planning began in 2015.
“When we planned this project six years ago, of course, we didn’t expect a pandemic, but we’re very happy with how things have gone,” said Tim Arnold, General Manager of Kalahari Resorts Texas.
Arnold said the Kalahari, through its 215,000 square feet of convention space, has targeted various Texas associations that hold large conferences.
Yawn also highlighted the impact of hotel tax revenue from the Kalahari on the recovery of the city’s local tourism economy.
Among the myriad of recreational options in the city, Yawn pointed to outdoor activities that include a wide system of paths, streams, and parks.
With the pandemic last and this year, she said outdoor activities had become a preferred option for people.
In addition to outdoor recreational activities, Yawn said, Kalahari is a solid addition to the recreational opportunities at Round Rock.
In just its first 10 months of operation, Kalahari Resorts Texas reported over $ 70 million in taxable income, 9% of which went to the city, according to hotel tax data available through the Texas Comptroller of Public Accounts.
Round Rock officials said most, if not all, of the hotel tax revenue generated by the city’s 7% tax rate would be used to pay off debts and incentives under the Kalahari deal.
Growth in other areas
Over the past year, Pflugerville’s tourism industry has grown so rapidly that the city opened its own convention and visitor office in June.
The new facility will be part of the city’s Chamber of Commerce, and Gonzales said the office will boost local tourism by working to make Pflugerville a destination in the area. While local businesses include the Pflugerville Chamber of Commerce and the Pflugerville Community Development Corp. tourism has not yet had a department of its own, he said.
“I think that the congress and visitor office will give us a better opportunity to recruit even more not only for companies, but also for groups – especially at congresses, conferences, etc.
In Hutto, Robich said, the city is also focusing on business development to attract visitors.
Andy Perry, executive director of both Austin Executive and Houston Executive airports, said local business interests like the Tesla Gigafactory are driving travel to the east and northeast of Austin, and that many who come through his Pflugerville Airport stay at the nearby hotels .
“Our trip has definitely caught up with the growth and development of the area,” said Perry. “We saw an increase in traffic through the airport. [It’s] very good for us, certainly a very positive effect. “•
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