Hotel tax revenue fuels infrastructure growth across McKinney From the cover
The context
The overview
HOT Revenue collected The city saw a dip in revenue collections during the COVID-19 pandemic but rebounded in the years following. Revenue collected in FY 2022-23 saw a nearly 21% increase from the prior year. $97.57 per day Annual average daily rate
hotel properties also pose a similar challenge. Business travelers often want a luxury hotel experience while also having access to a walkable environment with restaurants and amenities, Werner said. Rick Wells, who has owned the Grand Hotel since 2021, said his hotel’s guests are drawn to the downtown’s “unique” and historic cultural district. As the only hotel on the city’s downtown square, the Grand Hotel is a popular destination for business travelers due to the walkable area and access to nearby restaurants, he said. “Having hotels come to our city allows more people to experience what we do in downtown McKinney, … so hopefully that trend will continue as we expand and this crazy growth continues in our area,” he said.
The city has 20 hotels, but only one, the Sheraton McKinney, is a full-service hotel that offers event and meeting space, an on-site restaurant, and other amenities. The remaining 19 are select service, meaning they have limited amenity offerings. Nearly half of McKinney’s operating hotels were built in or prior to 2000, and only three hotels have opened within the past five years, according to data from Visit McKinney. “We have a mixture of newer properties with modern amenities, but we also have several [with] aging infrastructure that [have] been around for 30-plus years,” McKinney Mayor George Fuller said in an email. In addition to the varying ages and service levels of the city’s hotels, the locations of the
$72.28 per day
$93.24 per day
$80.28 per day
$83.14 per day
Hotel inventory
2018-19 2019-20 2020-21 2021-22 2022-23
McKinney’s hotel infrastructure includes properties over 70 years old and properties that have opened within the past five years, as well as a number of hotel projects that are in the development phase.
75
SOURCE: VISIT MCKINNEY/COMMUNITY IMPACT
20
Lodging facilities in McKinney are required to pay a 6% hotel occupancy tax to the state as well as a 7% tax to the city. Occupancy taxes come from room rentals, according to the Texas Hotel and Lodging Asso- ciation. They are generally added onto the bill in addition to other fees, such as those for cleanings or extra guests. Texas law restricts use of the revenue to activ- ities that support tourism and the hotel industry. The tax revenue collected from hotel stays is used to fund the city’s convention and visitors bureau as well as special events, marketing and tour- ism-related grants, according to Visit McKinney. Some of the most common motivations for hotel stays in McKinney include guests attending weddings in the area as well as sporting events, Werner said. Recent growth in HOT revenue collected as well as occupancy rates across local hotels, with the city reaching a 72.5% occupancy rate in the past fiscal year, points to a growing need for new hotels, Werner said. Fuller also noted that the city’s occupancy rates surpassed all other Collin County cities in FY 2023 and are drawing the interest of a variety of hotel developers. “We’re starting to see the natural, organic interest in bringing not only hospitality products but entertainment products to the community,” Werner said.
Pre-2000 Post-2000 Under development
2
13 Home2 Suites 14 La Quinta Inn & Suites 15 Motel 6 McKinney 16 Sheraton McKinney Hotel 17 SpringHill Suites 18 The Grand Hotel & Ballroom 19 TownePlace Suites 20 WoodSpring Suites 21 Avid Hotel 22 Denizen Hotel 23 Echo Suites 24 Marriott Autograph 25 Tru by Hilton
5
1 American Inn 2 Days Inn 3 Econo Lodge Inn & Suites 4 McKinney Inn 5 Red Roof Inn & Conference Center 6 Super 8
10
4
380
1
8
9
15
5
6
21
18
G INIA PKWY.
7
LOUISIANA ST.
7 Best Western Plus McKinney Inn & Suites 8 Comfort Suites 9 Fairfield Inn & Suites 10 Hampton Inn & Suites 11 Holiday Inn & Suites McKinney-North Allen 12 Holiday Inn & Suites McKinney-Frisco East
3
McKinney
75
23
ELDORADO PKWY.
17
13 25
19
5
11
16
STACY RD.
Fairview
121
LLIN MCKINN
75
14
12
24
22
Allen
MAP NOT TO SCALE N
SOURCE: VISIT MCKINNEY/COMMUNITY IMPACT
20
COMMUNITYIMPACT.COM
Powered by FlippingBook