Tourism industry in Round Rock, Pflugerville and Hutto shows recovery after COVID-19 closures

Local tourism and the travel industry are recovering from the setbacks caused by the COVID-19 pandemic, a trend reflected in soaring tax revenues for cities in the region.

In Round Rock and Pflugerville, business and tourism strategies are driving increases in hotel tax revenues and local economic growth, albeit from slightly different sources.

Sports tourism and family tourism are driving Round Rock’s growth, while business travel has spurred an increase in hotel stays for Pflugerville, according to local officials.

“Across the industry, we are certainly seeing improvement as COVID[-19] the restrictions are lifted. More and more people want to go out and do things, ”said Nancy Yawn, director of the Round Rock Convention and Visitors Bureau.

City officials attribute Round Rock’s explosive recovery and growth in tourism revenue to the opening of Kalahari Texas Resorts in November 2020.

Located across from Dell Diamond on East Palm Valley Boulevard, the Kalahari has brought 975 additional hotel rooms, convention space, and entertainment options to Round Rock.

Regarding Pflugerville, Amy Madison, executive director of Pflugerville Community Development Corp., said the increase in hotel stays is largely due to business travel driven by the city’s proximity to the Austin Executive Airport.

“It’s not so much about entertainment as it is business,” Madison said. “It helps increase the numbers… we had pre-COVID[-19] [hotel stays]- earlier, faster and faster.

Define hotel tax revenue

Hotel occupancy taxes are paid by a guest who is staying at a hotel, bed and breakfast, or other accommodation option. Taxes contain a city and state component, with state hotel taxes being levied on accommodations that cost more than $ 15 per day and local hotel taxes on accommodations costing more than $ 2 per day for less than 30 days, according to the Texas Comptroller’s. Office.

In Round Rock, city documents say the rate is combined with a resort tax that goes to Round Rock Sports Center.

The revenue generated directly from hotel tax on the city’s 4,542 hotel rooms is a smaller source of revenue in and of itself than sales tax, but it is used to fund programs and services that support tourism, but that does not prevent residents from benefiting from it, as the supported facilities are commonly used by both.

City staff say that when people stay in Round Rock, they spend money in the community and the revenue from sales taxes and blended drinks stays local.

Hotel tax revenue can only be used to directly promote tourism and the convention and hospitality industry under state law. In 2020, these revenues represented around 1% of the city’s proposed budget, according to the city.

Texas state law requires cities to invest revenue locally to promote tourism and encourage hotel stays. City documents indicate that the maintenance of venues that are part of the Round Rock’s Sports Capital of Texas sports tourism initiative and a strategic goal of being the sports capital of Texas are designated for these funds.

The sites include Dell Diamond, Round Rock Sports Center and Round Rock Multipurpose Complex as well as the city’s arts and culture division of the communications and marketing department.

A minimum of 5% of the city’s hotel tax revenue funds the Round Rock Department of Arts and Culture, according to the city.

“It helps with the infrastructure and [to] add services, ”said director of sport tourism, Chad McKenzie. “[It] keeps property taxes low. It’s a big push from what we do. It employs a lot of our fellow citizens here and pays their salaries. We are really looking to continue down this path and make it even better than before the pandemic. “

Meanwhile, Pflugerville officials are using hotel tax revenues to support events such as Deutschen Pfest and to pay incentives to Courtyard Austin Pflugerville and Pflugerville Conference Center under its Chapter 380 tax agreement, according to documents from the city.

Local trends

Before the COVID-19 pandemic restrictions began in 2020, tourism revenues in Round Rock, Pflugerville and Hutto had tended to increase for at least five years. Hotel tax and tourist tax revenue has steadily increased between 1% and 5% per year between 2017 and 2020, according to data from the three cities.

City data shows the impact of COVID-19 on travel and some tourism activities translates into a 31.47% drop in hotel tax revenues in Round Rock, to just under $ 2 million from less in 2020 than in 2019.

However, in 2021, hotel and site tax revenue increased 126.83% year-over-year from $ 4.1 million to $ 9.3 million, an increase which city officials attribute in large part to the opening up of the Kalahari.

In Pflugerville, officials said 2016 was the first year the city started collecting hotel tax revenue, and since then it has grown steadily until the COVID-19 pandemic forced the city stop travel in 2020.

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 the SH 130 has helped the city grow as the need for hotels, restaurants, shops and entertainment increases.

“The toll highways, both [SH] 45 and [SH] 130, [have] been the economic boom and growth of Pflugerville, ”said Gonzales. “We [have] become more of a regional community than anything else.

The town of Hutto also saw an 11.94% increase in hotel tax revenue from 2020-21.

Kristi Robich, head of community outreach and programs for the city of Hutto, said by email that the return to 2021 of major local events canceled in 2020 due to COVID-19 had helped the recovery.

For example, the local KOKEFEST event drew 20,000 people to Hutto this summer, according to Robich.

“Although hotel occupancy tax revenues in Hutto increased in 2021 compared to 2020, they still have room to bounce back from the pandemic, like most communities,” said Robich.

The sports capital of Texas • and the Kalahari effect

In addition to traditional tourism in Round Rock, city data shows that sports tourism has seen an increase in activity from the previous year. The main function of the sports and tourism management department is to program, plan and maintain sports facilities and implement the city’s long-term tourism plan, according to a city website.

McKenzie said event attendance is returning to normal with major sporting events resuming at venues such as Dell Diamond, Round Rock Sports Center and Round Rock Multipurpose Complex.

A September statement from the city’s sports tourism department said the industry has generated $ 110 million in economic activity for the city since 2014.

Data from the city shows that economic activity driven by sports tourism reached an all-time high in 2019 when Round Rock’s strategic goal of providing high-quality sports facilities in a conveniently located area resulted in a net gain of $ 23.6 million. •• “We’re working with a consultant to see what the next thing we can bring to Round Rock as part of our sport tourism efforts,” McKenzie said.

Beyond the income created by sporting events, project managers said the Kalahari opened last year under circumstances that were far from expectations when planning for the project began in 2015.

“Obviously when we planned this project six years ago we weren’t expecting a pandemic, but we’re very happy with the way things turned out,” said Tim Arnold, CEO of Kalahari Resorts Texas.

Arnold said the Kalahari, with its 215,000 square feet of convention space, has appealed to various associations in Texas that host large conferences.

Yawn also highlighted the impact of tax revenues from Kalahari hotels on the economic recovery of local tourism in the city.

Among the myriad of recreational options in the city, Yawn highlighted outdoor activities that include an extensive network of trails, streams, and parks.

With the pandemic raging last year and this year, she said outdoor activities have become a must-have option for people.

In addition to outdoor recreation activities, Yawn said the Kalahari is a solid addition to the recreation options at Round Rock.

In its first 10 months of operation, according to hotel tax data available through the Texas Comptroller of Public Accounts, Kalahari Resorts Texas reported more than $ 70 million in taxable revenue, of which 9% went to the city.

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 debt and incentives under its deal. with the Kalahari.

Growth in other areas

Over the past year, Pflugerville’s tourism industry has grown so rapidly that the town established its own convention and visitors bureau in June.

The new entity 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 region travel destination. While local businesses have had the Pflugerville Chamber of Commerce and Pflugerville Community Development Corp., tourism hasn’t had a dedicated department so far, he said.

“I think that thanks to the Convention and Visitors Bureau, we will have a better outlet for even more recruitment in terms not only of companies, but of groups – in particular groups based on congresses, conferences, … things of that nature, ”Gonzales said. .

In Hutto, Robich said the city is also focusing on business development to attract visitors.

Andy Perry, executive director of Austin and Houston Executive Airports, said local business interests, such as the Tesla Gigafactory, are driving travel to east and northeast Austin, and many of those who pass through its Pflugerville airport stay in nearby hotels.

“Our travels have certainly matched all of the growth and development in the region,” said Perry. “We have seen an increase in traffic at the airport. [It’s] very good for us, a very positive impact for sure. “•

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