Staying in a hotel for SXSW? You're being taxed and the City of Austin is benefiting

The City of Austin charges a hotel occupancy tax. The money collected goes back to tourism efforts -- things like parks, transportation and art. It will also help fund the City of Austin's new convention center.

AUSTIN (KXAN) -- It should be no surprise to Austinites at this point, with major events happening in our city, hotels and short term rentals get booked... and quick.

A quick drop downtown right now, during South By Southwest, and you'll find plenty of people who will spend the night in one of Austin's many hotels.

"I'm staying literally across the street from Paramount theater. Just being able to easily walk around everywhere," one of those people, Vanessa Mukhebi, a SXSW speaker visiting from Chicago, said.

People like Mukhebi are also paying a tax that helps fund some of Austin's major arts and culture projects.

Hotel Occupancy Tax -- what gives?

The City of Austin charges a hotel occupancy tax. The money collected strictly goes back to tourism efforts -- things like parks, transportation and art. It will also help fund the City of Austin's new convention center.

"Hotel occupancy taxes are a great way for Austinites to take advantage of revenues that they don't have to pay. So this is a real economic boom to the city," said Daniel Ronan, the chair of the Austin Tourism Commission.

Last month, Angelou Economics told the Austin Tourism Commission that SXSW brings in anywhere from $1.1 million to $1.9 million in hotel tax.

The City of Austin's hotel occupancy tax rate is 11%. There's a 2% tax included in that rate going toward the Austin Convention Center reconstruction project. Short term rentals, motels and other short term accommodations also pay the tax.

The Tourism Commission wants the City of Austin to lean into those dollars -- find ways to keep people in Austin and coming back to Austin when they're in town for major events. It talked about that in a meeting last month and could later bring forward recommendations to the city council.

"As we move forward, it's important that we're thinking strategically about how to develop all types of tourism and travelers here to Austin to ensure that this revenue source can continue to be depended on by the city and its arts and culture programs," Ronan said.

That could be particularly important as the city closes the convention center for major reconstruction. You can read more about that project and its impacts here.