The Lebanon City Council recently an approved an increase to its hotel-motel tax, although some hotel owners said it will not have a long-term benefit to them or the city.
The council voted to increase the tax rate from 2 percent to 4 percent, which brings the city’s rate in line with Mt. Juliet’s hotel-motel tax rate.
“It will bring in a little extra revenue for us,” Lebanon Mayor Bernie Ash said.
The increase will bring about $300,000-$400,000 more for the city, according to Ash.
State Rep. Clark Boyd said years ago, cities that had a hotel-motel tax could place revenue from the tax into its general fund to be used however city leaders desired.
“It became sort of policy — or unspoken policy — in the state of Tennessee a few years back that hotel-motel tax had to go exclusively to economic development or tourism,” Boyd said.
However, because Lebanon already had the hotel-motel tax, a joint Tennessee House-Senate committee came to a compromise on the issue, allowing the city to use revenue from the previous 2 percent hotel-motel tax in any way it wanted, while additional revenue from the hotel-motel tax increase must go toward economic development or tourism.
Ash said some funds from the increase would likely be used on the future soccer, baseball and softball complex on the city’s south side.
Barge Design Solutions will oversee the creation of the Lebanon Sports Complex, to be located on about 150 acres of land along Highway 231 just south of Stumpy Lane.
“We’re hoping to use some of it on the sports complex because we expect it to bring in some extra revenue for the city,” Ash said.
Roshan Patel, owner of La Quinta Inn and Suites, said he didn’t believe the increase would sustain the city’s needs over a long period of time, especially if Lebanon doesn’t expand it hotel services.
“We don’t have any hotel that you can step your foot into and have a drink, have more than 5,000 square feet of meeting space for ball teams and ball tournaments. We don’t have any of that,” he said.
Patel said Mt. Juliet, which offers multiple full-service hotels, offers 638 rooms, compared to 1,120 in Lebanon, as well as 194 rooms on State Route 109.
Lebanon also has two hotels under construction on South Hartmann Drive near Franklin Road.
Mt. Juliet City Manager Kenny Martin said the city’s 4 percent hotel-motel tax brought in about $682,000 in revenue in 2018.
“When you look at other cities and towns — now people just go on Expedia, Holiday Inn Express online or Hampton online — and they’re looking like, ‘Hey. Where do I want to stay tonight?’ A lot of times, they’re rate-driven. Two percent tax increase a lot of times can make or break whether or not you’re going to get a ball team booked in,” Krishna Patel said.