Hotel taxes may rise to fund for convention promotions

An effort by Atlanta's hospitality community to be more competitive with its peers could soon increase the cost of staying in the city's hotels.

Gov. Nathan Deal last week signed a bill that would increase the city's 7 percent hotel-motel tax to 8 percent, with funds from the 1 percentage point hike going to a package of promotions -- including incentives -- to help lure conventions to the city.

Backers of the legislation, which now heads to the Atlanta City Council for consideration, say it could bring in as much as $6 million annually and is needed to help Georgia's capital attract meetings that otherwise are going to other cities.

"We were losing out on about five large citywides a year," William Pate, president of the Atlanta Convention & Visitors Bureau, said recently. "Where we have been losing out is incremental opportunities to get additional business into the city.

"By and large what is happening is we put together our package ... and then as we get down to the final hour, our competitors have cut some of their transportation costs or agreed to throw a reception for the board of directors or some sort of marketing opportunity that we have just not had the financial capability to match," Pate said.

Pate said the money, which would be overseen by an oversight committee, would be used in three different areas: an incentive program that would pay for promotional materials to boost convention attendance; funds for sporting event bids such as the NCAA Final Four or Super Bowl; and to defray the costs associated with showing off the city to decision-making convention groups such as Meeting Professionals International and Destination Marketing Association International.

But Heywood Sanders, a professor of public administration at the University of Texas at San Antonio, said he doubts the funding will put Atlanta ahead in the game. Every city has a new strategy it thinks will help win convention business, he said, with some going as far as giving out cash.

"This is the way business is done now," he said. "Having more money to do this is not likely to get you very far."

Driving convention traffic is important to Atlanta's $10 billion hospitality community. The visitors fill hotel rooms and restaurants and have largely been responsible for the growth of attractions around Centennial Olympic Park.

Conventioneers are also crucial because the metro area has an oversupply of hotel rooms that has hindered hoteliers' ability to raise room rates.

Ed Walls, general manager of the Westin Peachtree Plaza Hotel, said the fund will make it easier for Atlanta to compete.

"This gives us the opportunity to be on the same playing field as our main competitors," he said.