Supporters of a hotel tax increase in OKC say it would promote tourism. Will it be enough?

Oklahoma City voters will decide Tuesday whether to increase the local hotel occupancy tax in an attempt to generate more funding to promote the city's tourism industry.

If passed, the tax would go from its current rate of 5.50% to 9.25%, effective Oct. 1. The tax increase would be charged to people staying overnight in a hotel or renting home-sharing properties, such as Airbnbs, in Oklahoma City.

Proponents of the hotel tax increase, including Oklahoma City Mayor David Holt , say the 3.75% increase in funding would be crucial in helping attract more visitors to the city by expanding marketing efforts and supporting large events.

"A lot of people don’t realize that behind the scenes, oftentimes when we’re talking about big events, there’s some sort of incentive involved in it, just like there is with economic development," Holt told reporters shortly after early voting Thursday. "You’ve got to have resources for that, and you’ve got to have resources that are commensurate with your peer cities.”

Oklahoma City residents last considered raising the hotel tax rate in December 2004. That proposal passed with 89.4% approval , and Holt believes that unusually high level of support was because the tax is paid almost entirely by visitors to the city.

"Visitors are kind of like the best taxpayer there is: They come in here, they barely use our city services, but they pay sales tax and hotel tax, and they are a significant contributor to our core services," Holt said. "Police, fire, streets — visitors are paying a lot of that, and so we want to bring in more visitors. We built a city that can handle that, but we do have to advertise."

What would change about hotel taxes in OKC if Tuesday's measure passes

The hotel tax increase would be in addition to the state’s 4.5% sales tax, the current 5.5% hotel charge, and the city’s 4.125% sales tax, resulting in a total room tax of 17.875%. The current total tax tacked onto hotel rooms is 14.13%.

Tuesday's election also could change how the hotel tax collections are spent. Tourism promotion would have 75% allocated to it, and 13.3% would go to event sponsorships. About 6.7% also would be used to fund capital improvements at the OKC Fairgrounds , and 5% would be designated toward improvements at the MAPS 3-branded Oklahoma City Convention Center .

Currently, 55% of the hotel tax goes toward the fairgrounds, with 36% directly funding tourism promotion and 9% going to event sponsorships.

More: OKC voters to decide hotel/motel tax: 'This is just about the best deal there is' | Mayor

Zac Craig, president of Visit OKC, said that, thanks to the city's MAPS initiatives , tourism had become a vital part of the local economy, but also said that more funding would be needed to boost promotion efforts to fill hotel rooms, eateries and venues.

"OKC has invested billions in world-class infrastructure and facilities, but we need to also scale our destination marketing efforts as we compete with larger peer cities to attract leisure, convention and sports visitors,” Craig said in a statement.

Craig and Holt said that local hoteliers support the tax increase. If approved by voters, the tax would still be lower than what is charged in peer cities such as Kansas City, San Antonio and Memphis.

"The hoteliers ... are really the only group that would ever have a high sensitivity about this because they would be worried potentially about the impact on their business and their competitiveness," Holt said. "But because the rate is already so low, which they totally understand, they don’t believe that it harms the competitiveness and they see the benefit that those resources provide to their business."

More: Proposed hotel tax increase in OKC is now heading to voter ballots

Support and criticism of the OKC hotel tax increase

But another group has voiced concerns in recent weeks about potential consequences of the hotel tax increase. The Homeless Alliance, a nonprofit providing resources to the city's unhoused population, is worried about how the tax hike could affect people without homes who use local hotel rooms much more than the average resident.

"As service providers, we know how real the hotel cycle is for our neighbors experiencing homelessness," Meghan Mueller, CEO of the Homeless Alliance , said in a July 30 statement. "Hotel rooms are often a short-term option for people who have no other place to stay, but they can eat up what little income the individual has to put towards housing, leaving them unable to come up with a security deposit and first month’s rent for an apartment."

"Increasing fees associated with staying in a hotel could potentially further perpetuate that cycle of people getting stuck staying in hotels without the resources needed to move out," Mueller concluded.

In another statement Friday, Mueller stood by her previous comments, but said that the nonprofit has since met with the Greater Oklahoma City Chamber , an organization which has run high-profile campaigns for various local initiatives and is advocating for the tax increase.

"We are glad to share that we've been able to share those concerns with the Chamber of Commerce and recognize common ground," she said.

Spokespeople with the "PromoteOKC" campaign also told The Oklahoman on Friday: “The best way for our community to improve services for the unhoused is to increase our tax dollars, create new jobs, and grow our economy, so that we can provide the services they need.”

At least one Oklahoma City Council member said her issues with the proposed tax increase remain. In a thread detailing the reasoning behind her decision on X (the site formerly known as Twitter) , Ward 6 Councilwoman JoBeth Hamon said she's voting "no."

"I did vote to send it to a ballot, which I somewhat regret not making this more of a conversation at the time, but after thinking on it more, the way this came to Council felt rushed and not very thoughtful," Hamon said.

Debate ensued among councilmembers when the ordinance proposal was introduced in May , and some even questioned why capital improvements for the convention center and fairgrounds would see additional funding from the tax increase, while other projects were not being given similar priority.

Hamon contends that the council was not presented much information about how much of the hotel tax is actually collected from people visiting the city versus locals dealing with housing insecurity and living in motels, although she admitted there would probably be issues with gathering that type of data anyway.

"Additionally, I think we could be doing a better job of working to make sure our tourism economy is really supporting good, dependable jobs for locals (and) promoting our commercial districts more robustly," Hamon said. "When we were presented this idea, the (2028) Olympics wasn’t a conversation most of Council was aware of at the time, but I would have preferred we had known that was a consideration, given the (amount) of local funding we’ll be asked to contribute to getting facilities 'Olympics ready.'"

Ultimately, Hamon said, she believed a more thorough discussion about how the tax increase would be spent could have been had "beyond an ask" from the Chamber's Visit OKC division, also known as the Convention and Visitors Bureau .

"I do support the concept of a hotel/motel tax that can help in tourists paying for things that promote the tourism economy," Hamon said, "but I think this proposal could have been more thoughtful in its process and it’s worth telling Council (and) CVB to reconsider how we administer this tax."

Polls will be open from 7 a.m. to 7 p.m. Tuesday. That day, the EMBARK bus, RAPID and OKC Streetcar services will be free on all routes to help registered voters make it to the polls.

This article originally appeared on Oklahoman: Supporters of a hotel tax increase in OKC say it would promote tourism. Will it be enough?