Denison moves Airbnb, other rentals into hotel category
On Monday, the city Denison moved to put the city’s short-term rental units in the same category as larger hotels.
The Denison City Council voted unanimously to amend city ordinance to allow the city to impose hotel/motel occupancy taxes on short-term rentals within the city and is extra territorial jurisdiction.
The move comes amid the rise of services like Airbnb that allow for the rental of residential units, much like a hotel room.
“One thing I think we’ve seen through COVID-19 is that short-term rentals really have increased in popularity as folks travel around and try to avoid crowds, hotels and larger-stay opportunities,” City Manager Jud Rex said.
Under the ordinance, these short-term rental units will now be required to charge and collect a 7 percent local HOT tax, in addition to the 6 percent collected by the state.
To date, Rex said there are about 50 active short-term rentals in the city and its ETJ, which includes areas along and around Lake Texoma.
In most years, the city generates about $400,000 in HOT revenues. While this change is only expected to bring in an additional $10,000 to $15,000 per year, Rex said it will help the city better market itself.
Traditionally HOT funds have been used to market Denison as a tourist Destination and have been used within the Main Street Department to mark events and other gatherings.
However, the city has been hesitant to use these funds in the past to market lake-side rentals as they did not contribute to the fund.
“They are so many tourism opportunities that are outside city limits but within our ETJ, especially along and around the lake,” Rex said.
Short-term rentals have skyrocketed in 2020 amid the ongoing COVID-19 pandemic as vacationers have flocked to hotel alternatives, Denison Marketing and Tourism Coordinator Rebecca Robinson said.
“During and post COVID, travelers are seeking more privacy when vacationing and, therefore, seeking out short-term rentals over hotel stays,” she said.
Since the beginning of the pandemic, nightly rates for short-term rentals have increased from $143 to $158 per night. occupancy rates have also risen from about 59 percent to as high as 92 percent.
“Short-term rentals are assets to our community and as we market them to tourists as over-night stay options, we will be bringing business to the community and increase hotel occupancy tax revenue,” Robinson said.
The average monthly revenue from short term rentals also went from $1,953 to $3,717 over the same period.
Meanwhile, hotels and hospitality have had a difficult year amid the pandemic with occupancy rates between 30 percent and 47 percent. The average nightly rate for a Denison hotel is currently $92.
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at firstname.lastname@example.org.