Memphis City Council to Discuss Hotel Tax Increase

MEMPHIS, Tenn. - A Memphis City Councilman wants to charge tourists more to stay here. It's part of a plan to help fill what's projected to be a $30-40 million budget gap this year, but not everyone is on board with the idea.

Staying at a Memphis hotel or motel may get more expensive. Memphis City Councilman Edmund Ford, Jr. wants to increase the hotel-motel occupancy tax to 5 percent. Right now it's at 1.7 percent.

Ford plans to present the idea at Tuesday's City Council Economic Development and Tourism Committee meeting.

Councilman Kemp Conrad, Chair of the Economic Development and Tourism Committee, said he likes that tax won't affect Memphians unless they stay at a hotel, but believes it will deter conventions from coming here.

"My phone has been ringing off the hook with people very worried," he said. "This is something I don't think will benefit the city long term."

According to the metropolitan Memphis Hotel and Lodging Association, Memphis already has the highest combined bed tax in the nation. With the proposed tax increase, Memphis bed tax would be 3 percentage points higher than New York's.

"At the end of the day, when we compete for convention business - they send us a bid, look at hotels, and taxes are part of that - so if we're already the highest and we jack it up more, higher than New York City, it makes us less competitive," Conrad explained. "I think ultimately it will mean less business for hotels, restaurants, bartenders, people working in hotels."

Ford said the increase will generate $7 million, and added that right now, the city spends almost $11 million on tourist-related services like the Pink Palace and the Convention Center; he looks at the increase as a cost-recovery effort.

He said the city is looking at a $30-40 million shortfall in next year's budget and needs the money. Conrad said the city also needs the business.

"Fred Smith came to council a few years ago and said if you don't like something, tax it."