Hotel revenues in Dallas, Texas recently passed the $1 billion mark. VisitDallas, the organization that promotes meetings, events, and conventions reports that hotel revenues hit $1.02 billion for fiscal 2017-2018, and the numbers are expected to be even higher for the current fiscal year.
Typically, higher revenues lead to a higher property tax liability so proactive tax management is essential to stay competitive and profitable.
The last fiscal year set records not only for hotels, but also for the number of visitors to the area and the amount of money they spent.
During this time period, 27.2 million people visited Dallas and spent $4.7 billion, fueling an economic impact of $8 billion. The number of annual visitors increased 13% over the past five years and spending rose by more than $650 million.
Top events of VisitDallas’ last fiscal year were:
National Football League Draft
Red River Showdown
National Cheerleaders Association championship
Goodyear Cotton Bowl Classic
Lone Star Classic, Austin Junior Volleyball Association
Mary Kay Inc. summer seminars
Big 12 Conference Football Championship
National Rifle Association annual meeting
Dallas Market Center’s home and gift market
Mexican National Team U.S. tour
Visitors need a place to stay and the increased tourism raised the number of hotel room nights booked from 7.36 million in 2013-2014 to 8.12 million in 2017-2018. Though hotel occupancy rates dipped slightly, hotels raised the revenue per available room by nearly $3 in 2017-2018 to a five-year high of $86.14.
With reports of rising hotel revenues, appraisal districts will continue to pursue higher valuations. Left unchallenged, the valuations can lead to more expensive property tax bills.
The county must annually assess each hotel property at 100% of market value based on reported revenues. New values will be released beginning in April. However, best practices suggest identifying appeal positions much earlier. Issues such as occupancy and obsolescence can create appeal opportunities to achieve a lower tax burden.