Last week, the Farragut Tourism/Visitor Advisory Committee voted unanimously to recommend a hotel tax to the Farragut Board of Mayor and Aldermen. The tourism committee doesn’t make policy decisions, but its recommendation has weight when the board considers an ordinance change.
A hotel occupancy tax is a tax placed on each night’s stay at a hotel. It is paid by visitors, not residents, and is not a “gateway” tax that will open the door for future taxes in Farragut. In fact, a successful tourism program could help the town avoid a property tax in the future.
When the hotel tax goes before our board this year, it will be the third time. The board tabled a discussion about adding the tax in 2012, and the proposed tax failed in 2018 in spite of the fact that three of five members voted for it. (State law requires the hotel tax to pass by a super majority, which is four of five board members.)
At the time of last year’s vote, the town was new to the tourism game. We had just hired a part-time tourism coordinator and didn’t yet have a formal plan for how proceeds from a hotel tax would be used. And while staff had reached out to local hoteliers, there had been limited dialogue.
This year, the stage is set to pass the tax. A tourism committee was appointed by the board last fall and includes representatives from Farragut’s hotel, retail, restaurant and attraction industries. Tourism coordinator Karen Tindal, who has 18 months of hard work and education under her belt, has helped book large groups in Farragut hotels and advertised Farragut amenities in print, on TV and on social media. She’s worked closely with local businesses and developed a deeper understanding of the local hotel industry.
Did I mention that the tourism committee includes a hotel industry rep, and that the vote to recommend a hotel tax passed unanimously?
Additionally, the town now has a plan for hotel tax proceeds. A proposed bare-bones budget includes research to pinpoint potential visitors, targeted advertising, and an ambassador program that would train residents for outreach initiatives. Bigger ticket items, like wayfinding signage and a visitor app, are possible depending on the rate of the tax.
If Farragut passes a hotel tax, it will join our surrounding municipalities. The city of Knoxville adds a 3 percent tax on hotel stays, and Oak Ridge and Lenoir City each add 5 percent. The cap for the Farragut tax is set at 4 percent. Expect a lively discussion from the board about whether the rate should be based on a minimal tourism budget or one that includes higher-ticket items like a visitor’s center. (Proceeds from the proposed Farragut tax can only be used for tourism and/or marketing initiatives.)
Since the majority of cities, counties and states now tax hotel stays, the question has become why not take advantage of this opportunity, rather than why. Tourism is the state’s second largest industry and it continues to grow. With Top Golf and other attractive amenities coming to Farragut, this is the right time to start capturing visitor dollars in order to lure even more visitors. Overnight guests who eat in our restaurants and shop in our stores help keep our businesses strong and deliver tax dollars that provide amenities for residents. This is the right time to invite travelers of all kinds to Visit Farragut.
Wendy Smith coordinates marketing and public relations for the town of Farragut.