May 14, 2008 - Omaha's hotel tax may be in for a larger-than-anticipated increase.

Mayor Mike Fahey had proposed raising the tax by 1 percentage point to help pay for a new downtown baseball stadium but will now request an increase of 1.5 percentage points.

The added .5 percent won't be used for the baseball stadium, however.

The plan calls for the estimated $600,000 generated by the extra tax to go to the Omaha Convention and Visitors Bureau.

The idea for the extra increase came from an unexpected source: the Metropolitan Hospitality Association, a group that represents local hotels and tourist attractions.

The hospitality association was vocal in its opposition to a hotel tax increase when the idea surfaced earlier this year because Omaha already has one of the highest hotel taxes in the country. Members were concerned the larger tax would make it harder to lure visitors and conventions to the city.

But the group has reversed course and now wants the larger tax increase because it would help the visitors bureau promote Omaha as a destination.

"The Omaha Convention and Visitors Bureau is making great progress promoting the city with a very limited budget. We will support an increase in the hotel tax and the additional revenue (for the Convention and Visitors Bureau)," said Robert Watson, manager of Hilton Omaha and the president of the hospitality association.

The association proposed the idea to Fahey, and the mayor has agreed to push for the higher tax, said his spokesman Joe Gudenrath.

"He's willing to go along with their request to ask for a 1.5 percent increase," Gudenrath said.

The revenue generated by the extra .5 percent tax would more than double the amount of money the Convention and Visitors Bureau now gets from the city. The organization has an annual budget of $2.75 million, $500,000 of which now comes from Omaha. The remaining funding comes Douglas County, said City Finance Director Carol Edbon.

"We are very excited to have an opportunity to have funds available to promote the city," said Dana Markel, director of the Convention and Visitors Bureau.

Markel said the additional funding will primarily go to subsidies used to lure conventions to Omaha and to national advertising to promote the city as a destination.

Markel said there was intense discussion among the local hospitality industry about whether to support an increase in the hotel tax.

Omaha already has one of the highest hotel taxes in the county at 16.48 percent. Omaha's portion of that is now 4 percent.

Should the hotel tax increase move forward, Omaha will have the highest tax of the nation's largest convention cities.

But Watson said that the new downtown stadium will make the city a more attractive destination, and that in turn will help bolster the local hospitality industry.

"In the long run, the Metropolitan Hospitality Association believes it will benefit everyone," Watson said.

The hotel tax increase must be approved by the City Council.

An ordinance to raise the tax is scheduled to be introduced on Tuesday's council agenda, with a vote as early as June 10, Gudenrath said.

--Contact the writer: 444-1022, [email protected]

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