The Madison Mayor and City Council voted to increase the Hotel/Motel Tax from 5 percent to 7 percent at Monday’s regular meeting, just making the state legislature’s deadline in the nick of time. The measure passed narrowly in a 3-to-2 vote.
The Madison-Morgan Convention and Visitors Bureau (CVB) requested the increase in recent months in order to ramp up marketing efforts to draw more people into Madison and Morgan County.
“This will make us more competitive,” said Jamison Hooks, of the CVB, who pointed out that some of the neighboring tourist destinations, such as Athens and Covington are working with an 8 percent Hotel/Motel tax rate. “This would give us leverage to compete with other communities…We could get into more digital marketing efforts and attend more conferences and trade shows, so we can get Madison in front of as many potential visitors as possible…We are trying to attract more visitors, these temporary taxpayers, to help further our mission, which is to be more successful. The more successful the CVB is, the more successful Madison is and more successful the community is as a whole. The goal is always to get more heads in beds and to promote our community.”
But the CVB received some pushback from members of the Madison-Morgan Lodging Association (MMLA), which is made up of local hoteliers, who worried the increase Hotel/Motel Tax would eliminate Madison’s competitive edge, arguing the lower rate allows hotels to charge slightly cheaper rooms than surrounding communities with higher Hotel/Motel tax rates.
Mike Conrads, who spoke on behalf of the MMLA, asked the council to table the CVB’s request for another year to allow for more time to better quantify how the CVB’s marketing efforts actually impact lodging business in the community.
“We already compete among ourselves. It is a very competitive marketplace that we have right now,” said Conrads. “Doing this at this time when our business plans already locked and loaded is a major concern. We have made great strides with our CVB…It is a beginning, but we are not quite there yet. The timing is really bad, We just need more time, which is why we have asked to table this and to give us time to finalize those plans with the CVB to make sure they will be put heads in beds… but plan is place and the budget they have proposed is not where it needs to be.”
Councilwoman Chris Hodges proposed giving the CVB a one percent increase to 6 percent for one year in good faith, noting that after a year, the city reserved the rate to knock the Hotel/Motel tax back down to 5 percent if there are negative consequences that become apparent.
“They are obviously doing something right,” said Hodges. “I am of the mindset that we give them something and let them prove to us that they can do what they need to this year, to get more heads in beds…I’d rather they prove to us that they can do it rather then waiting and lose another year when we could be doing more product development and have more festivals and focus on getting more people into town, not just for a day, but for the whole weekend. I would like to give [the CVB] something because they have done such a good job.”
However Hodges motion to raise the Hotel/Motel Tax to 6 percent failed.
Councilman Eric Joyce emphasized that this tax increase was not a tax on hoteliers but a tax passed on to the patrons.
“This is still not a tax on the hoteliers, it’s a tax on the visitors,” said Joyce.
Councilman DiLetto, however, argued that it still could affects hoteliers’ bottom lines negatively.
“It is a tax on them if the visitors don’t come because of it,” said DiLetto, who noted the difference of a couple dollars per room could be a deciding factor when large groups and conferences shop around for lodging facilities. “Please, keep that in mind,” said DiLetto.
Joyce made the motion to up the tax to 7 percent, which passed in a 3-to-2 vote.
“Many communities in our region are currently charging the maximum 8 percent and others are heading in that direction,” said Ellen Sims, director of the CVB. “With this in mind, the CVB recognized that in order to market Madison competitively we needed to make similar strides. We see this increase from 5 percent to 7 percent as a fair compromise between the CVB and our lodging partners. This is an exciting time for our organization and we look forward to the new markets and opportunities this extra funding will allow us to explore.”