MOBILE, Ala. (WALA) – It might cost a little more next year to stay at hotels in the city, but hoteliers say they are hoping to get more bang for that buck.
The Tourism Improvement District, which since its creation in 2020 has assessed a fee on 63 hotels and motels in Mobile, is due to expire. It generates a little more than $1 million a year for marketing and other efforts aimed at boosting visitors to hotels. Supporters said they plan to ask the Mobile City Council to renew it for another five years – with a twist. Instead of paying a flat $1 fee per room per night, hotels would pay a percentage of their room rate.
Visit Mobile President and CEO David Clark said the proposal calls for 1 percent for the first six months, followed by 1.5 percent and then 2 percent for the last 2½ years. He said he anticipates the council taking it up in February.
“I think this is the very best tourism public-private partnership a destination could ever have,” he told FOX10 News. “Mobile was the first city in the state to do it, and hopefully (will) be the first city in the state to renew it.”
The Mobile Area Lodging Corp., made up of hotel owners and representatives of restaurants and attractions, decides how to spend the money. That has included digital marketing, night-time security for motels in Tillman’s Corner and landscaping. For instance, the corporation spent $75,000 on landscaping at the Africatown Heritage House, which tells the story of America’s last slave ship.
Clark said he expects the levy to bring in about $3 million by the time the rate rises to 2 percent. He said is important with a new downtown airport a $300 million Civic Center development on the way.
“It will triple the resources to be able to tell Mobile’s story, even better (than before),” he said. “And I think what’s really important is that we have new assets coming to the market. … Those assets need more batteries, right? And so, these are really batteries to really shed light on these wonderful things that are coming to our destination.”
But it’s not universally popular among hoteliers, who cannot opt out. Mike Cowart, who developed Candlewood Suites, Hampton Inn and Hilton Garden Inn in downtown Mobile, told FOX10 News that he is against the proposal. Over the summer, he showed council members a chart pointing to a flat occupancy rate for Mobile hotels during the years that the tax has been in effect.
“Look at my chart,” he said at the time. “Mobile occupancy has been 58 percent for the last two or three years. It’s not going up at all.”
But other hotel owners and managers said they support the program. Margo Gilbert, general manager of the Battle House Renaissance Mobile Hotel & Spa, said hotels have seen gotten good value from the Tourism Improvement District, or TID. She said the average daily room rate has increased almost 22 percent since 2019 even as the occupancy rate remained flat, which she attributed to a large increase in short-term rentals, like Airbnb.
“When people start talking about, you know, we haven’t seen occupancy grow since the TID, the short-term rentals have cut into that,” said Gilbert, who also is vice chairwoman of the board of the Mobile Area Lodging Corporation. “So, again, it’s the equivalent of having, you know, six 100-room hotels in the marketplace.”
Gilbert said a larger tourism improvement district budget will allow for expanded reach in marketing the city to travelers from other states.
“We can get into different areas where we haven’t been able to do so in the past because of limited funding,” she said.
Clark said about 15 percent of the money collected so far has gone toward physical improvements. One project that will be built soon is a $100,000 landscaping design that Clark calls a “gateway project” for the Tillman’s Corner exit off of Interstate 10.
“When you pull off the interstate, you’re gonna see a bunch of crepe myrtles there lying in the median,” he said. “And we’re gonna have a sign there, and it’s gonna be upgraded with lighting. So the sense of arrival to those hotels and too that community is gonna be greatly enhanced.”
As for the decision to switch from a flat $1 per room rate to a percentage, Gilbert noted that the fee ended up being a more significant levy for motels with much lower room rates.
“So it kind of evens out the playing field, if you will for all the different hotels throughout the market,” she said.
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