SAN ANTONIO — A big piece of the funding puzzle for a new Spurs arena will come from a proposed increase to the venue tax. That tax on hotel rooms and rental cars is paid for by visitors to San Antonio.
“The lodging market statewide has slowed this year but in San Antonio that slowdown started earlier” said Paul Vaughn, Director of Data Operations at Source Strategies.
Source Strategies is the company behind a recent study. Their study showed the occupancy rate down more than 7% in the downtown area compared to the same time last year.
But would lower occupancy rates have an effect on the tax money collected that would go to fund a Spurs arena? Not necessarily, since revenues are actually up with 2nd quarter revenues exceeding pre-pandemic levels.
“We’re seeing the demand is in the upper mid-scale, upscale, and then we got some new luxury products as well,” said Vaughn.
San Antonio has seen a net increase of 9 new hotels since 2019, giving people more options.
And with voters set to decide on a quarter percent increase to the venue tax, would that possibly have any impact on people’s decision to stay in San Antonio? The President of the San Antonio Visitors Alliance says he doesn’t think so.
“I don’t think that will have an impact negatively on people coming to our market because they would pay that level of tax in other markets.” said Bill Brendel, president and CEO of the San Antonio Visitors Alliance.
Regardless of the tax money collected, Bexar County’s maximum contribution to the new Spurs arena would be $311 million dollars. The city would contribute a maximum of $489 million.
The ownership of the Spurs have committed to spend a minimum of $500 million dollars on the new arena plus any cost overruns. And they guaranteed $1.4 billion in private development projects in the area.