Frequently Asked Questions
Fort Worth Tourism Public Improvement District
What is a Public Improvement District (PID)?
Public Improvement Districts (PIDs) are locally created districts that can be used to fund physical improvements or additional services within a defined area. Fort Worth has other public improvement districts located throughout the city.
What is a Tourism PID?
A Tourism PID (TPID) would be a public improvement district composed solely of hotels, focused on attracting conventions, group meetings, and increased hotel activity within Fort Worth.
Why does Fort Worth need a Tourism PID?
Funding available to the Fort Worth Convention and Visitors Bureau (FWCVB) has been far below the amount expended by cities that Fort Worth competes with across the nation for group and convention business. A TPID was recommended by Fort Worth area hotels primarily to start to level the playing field and pursue two important initiatives:
- To provide sufficient incentives to encourage organizations to bring large conferences, conventions, and meetings to Fort Worth
- To fund an enhanced marketing and incentive program to increase hotel stays within the city
What is the effective date of the assessment?
The assessment is effective for hotel room nights beginning on January 1, 2018 and continuing through September 30, 2027.
What was needed to establish a TPID in Fort Worth?
The TPID is authorized by the Provisions of the Public Improvement District Assessment Act, Chapter 372 of the Texas Local Government Code. The specific assessment plan was petitioned for by over 60% of the area hoteliers and was subsequently approved August 29, 2017 by the Fort Worth City Council.
How does the TPID generate its funding?
The TPID generates its funding through a two percent assessment on hotel room-nights sold at Fort Worth hotels with 100 or more rooms. The hotels with 100 or more rooms will include the two percent tourism public improvement district fee on the room night charge assessed to each guest. The two percent assessment applies on hotel stays that are subject to city hotel occupancy tax. The TPID assessments are remitted by the hotel to the City under the same schedule and process in place for payment of the city hotel occupancy tax.
How should items that are exempt from the local hotel occupancy tax be treated in terms of application of the 2% TPID assessment?
Items that are not subject to the local hotel occupancy tax are also not subject to the 2% TPID assessment. In other words, the same exemptions that are allowed when calculating the 9% Hotel Occupancy Tax (HOT), are allowed in considering the 2% TPID assessment.
Is the hotel guest responsible to pay the 2% TPID assessment?
Yes, it is included in the charges noted in the bill for the room night or included within the quoted room night rate.
What happens if the hotel guest refuses to pay the 2% TPID assessment?
The guest can be pursued for this charge in the same was as any other legal hotel charge. The 2% TPID assessment is owed by the Hotel even if the hotel fails to collect directly from the guest. The hotel may alternatively choose to itself cover the cost of the assessment and not charge the guest.
Are there any additional costs associated with a TPID for a Fort Worth hotel with 100 or more rooms?
No. The TPID assessment only includes the two percent TPID assessment collected from hotel guests. This two percent Fort Worth TPID assessment is comparable to the two percent Dallas TPID that has been collected for the last four years by most hotels within Dallas. The creation of the Tourism PID in Dallas has doubled Dallas’ conversion rate for securing conventions, and produced over a 17% increase in ADR and REVPAR for hotels within the District. The total amount a Fort Worth hotel would assess to its guest room night charges is 17 percent; this includes a fifteen percent hotel tax and the two percent TPID assessment fee. This rate is comparable to the existing and/or anticipated hotel tax rates in Texas’ major cities (e.g.; Houston at 17%; San Antonio at 16.75%.)
How is the TPID structured?
The Fort Worth TPID operates as a separate entity overseen by a ten-member board, eight (8) voting members of which are hoteliers from within the district and two (2) ex officio non-voting members, one from the Fort Worth Convention and Visitors Bureau (FWCVB) and one being the Executive Director of the Hotel Association of Tarrant County. The TPID board is responsible each year for creating a budget/service plan that is in line with the ten-year service plan and that is subject to approval by the Fort Worth City Council. The FWCVB staff acts as the administrative entity implementing the programs authorized by the TPID board.
Who is on the TPID Board?
The 10-member TPID board is appointed for a two-year term and includes the following representatives: two directors are representatives from Fort Worth hotels with + 300 rooms, three directors are representatives from Fort Worth hotels with 150 to 300 rooms, and three directors are representatives from Fort Worth hotels with 100 to 150 rooms. Two of the eight directors must represent hotels that are located more than two miles from the Fort Worth Convention Center. The Fort Worth Convention and Visitors Bureau CEO and the Executive Director of the Hotel Association of Tarrant County will serve as ex-officio non-voting members of the board.
How does a hotel group become a member of the TPID board of Directors?
We welcome the engagement of area hotel leaders on the Fort Worth TPID Board of Directors. Every two years, we will be putting together a proposed board of Directors for the TPID. As noted above, the voting members of the board will be composed solely of hoteliers in the District and will be geographically and property size diverse, reflecting the major ownership groups and areas of the city. The terms of the TPID Board of Directors will be for two years and will rotate between area properties while ensuring that there is always representation from the major ownership groups and quadrants of the city.
How much money will the TPID generate?
Approximately $4.6 million per year is expected to be generated in the first full year and will incrementally grow each year.
How are the funds that are generated by the 2% Tourism PID assessment being spent?
The funding is used for the following expenditures:
- Incentives and Sales Efforts
- Marketing Promotion & Advertising
- Site Visits & Familiarizations
- Event Funding Application Board
- Operations/Research/Administration
Does the FWCVB completely control how the proposed Fort Worth PID funds are spent?
No, the Fort Worth TPID board controls the expenditure of the funds, consistent with the adopted petition and service plan for the District that was approved by area hoteliers. The CVB administers allocated dollars as directed by the TPID board.
Are hotels able to “grandfather” groups already on the books at the time of approval of the TPID?
Business for which there is a prior contract is subject to a “prior contract exemption” which can be claimed on the form for remitting the PID fees. For example, in many cases in Dallas, hotels chose to work with the involved meeting planners and many did not have an issue allowing inclusion of the Dallas PID fee, despite the fact it was not addressed in the prior contract. That being said, an exemption is available for the Fort Worth PID and can be claimed by hotels for prior contracted business.
Is there any chance that any of the Tourism PID funds could be re-distributed by the city for purposes unrelated to the proposed petition and service plan to fund convention and group business incentives and additional marketing?
The proposed Fort Worth PID petition and service plan outline the major spending categories for all the funds. There is no authority for the City or for the TPID Board to make anything but minor adjustments to these categories and allocations approved by the hotels in the original ten-year service plan.
Are any of Fort Worth’s competitive cities such as Dallas, Grapevine, Irving, Arlington, Frisco, and Addison undertaking a Tourism PID or a hotel tax increase?
The Cities that are currently authorized to do a Tourism Public Improvement District under Texas state law include: Dallas, Austin, Arlington, Fort Worth, and San Antonio. Of that list, Dallas just renewed its district for a 13-year term due to its tremendous success. Arlington just recently created a TPID, and the City of Austin is in the beginning stages of creating its own. San Antonio hoteliers indicate that they plan to propose a District further in the future. For Grapevine, Irving, Frisco and Addison to propose such a District, they would need to get legislative approval to add in their cities to the authorizing state legislation
If the Fort Worth TPID is not successful, is it possible to discontinue its operations?
The TPID District must be renewed annually by the City Council and can be abolished at any time by most the hotel properties within the District. Therefore, there are multiple checks and balances in case the District is not performing.
Is the TPID permanent?
No. The TPID is in existence for ten years. After the ten-year period, the district's existence can be renewed, refined or dissolved by petition of over sixty percent of the area hoteliers. For the district to be renewed, it would also need the approval of the city council.