City of Woodcreek considers HOT once more, forms committee

The Hill Country has long been a popular destination for people looking to get away and relax in the scenic countryside.

Lodgings throughout the Wimberley Valley often reap the benefits of this popularity, including the city of Woodcreek. Following the city of Wimberley’s creation of the Hotel Occupancy Tax, the city of Woodcreek is considering doing the same.

A Hotel Occupancy Tax — often referred to as HOT or even, redundantly, as a “HOT tax” — is a tax on the rental of rooms that can be required by a city, county, state or country. “It is generally owed on the price of accommodations or any additional fees like cleanings or extra guests,” explains the Texas Hotel and Lodging Association on its website. “In some places, occupancy tax is required on a per person, per night basis. There are typically long-term stay exceptions that exempt reservations over a certain number of nights. Occupancy tax is generally paid by the guest, but the obligation to remit the taxes to the government usually falls on the host.”

The tax money collected can only be used in specific ways largely related to increasing the amount of overnight stays within a given jurisdiction.

Although the city of Woodcreek delayed the decision to increase its HOT for at least 90 days, the possibility is still on the table. To weigh the pros and cons of this decision, the city voted at its Oct. 26, 2022, meeting to create a HOT advisory committee.

“Council felt at the time that it would be better to have the committee review all the options first, pros and cons, and submit their findings to the council for a final decision,” Woodcreek Mayor Jeff Rasco said.

The Woodcreek City Council meeting on Nov. 9, 2022, further clarified the roles and responsibilities of the HOT committee and requested staff to advertise for applicants.

“We are currently assembling prospective committee members, and assuming the leading applicants are officially appointed at our next meeting on Jan. 11, the committee will begin deliberating shortly thereafter,” Rasco explained. “Committee members represent existing lodging businesses in our ETJ and Wimberley’s, or have had past experience in the lodging industry. Other members will be Woodcreek citizens with hospitality and HOT experience.”

“Between my professional experience and that of the potential committee members, we will have well over 100 years of experience in the hospitality industry and significant knowledge of Hotel Occupancy Taxes,” Rasco added.

Community opinion over the HOT has been divided, with some staunchly against the possible increase. Those against the tax cite the overturn of the city’s initial HOT, which was established in 2008 and reversed in 2013.

“The impact to the lodging community was significant,” said Hunter Jones, general manager of The Lodge at Cypress Falls, said in a letter submitted to the Wimberley View. “The owners did not experience the City Council’s promised ‘increase in tourism.’ A few of the lodging owners went out of business. Others were forced to sell.”

Jones and others point to the HOT as an additional and unnecessary cost for visitors to stay in Woodcreek, one which may be responsible for turning them away.

Rasco asked that Woodcreek residents and business owners approach the issue this time around with an open mind and participate in the ongoing public input process.

“HOT revenues can only be used for specific purposes, and we need to be certain that if a HOT is initiated, funds will be used wisely and correctly,” he explained. “We are fully aware it is not ‘free money’ for our general fund, every cent would be held in specially designated accounts. Again, that is if the committee and council agree to move forward with a HOT implementation.”

“Contrary to what may have been printed or posted recently, it is not a foregone conclusion,” he added. “I trust the committee to do the work, and bring the best possible recommendations for the city to council.”

For more information about the Woodcreek City Council and its upcoming meetings, visit woodcreektx.gov/citycouncil.