Hotel Occupancy Tax Grant Policy

The City of Fredericksburg's Hotel Occupancy Tax (HOT) Grant Policy offers guidance for organizers seeking funding assistance to promote tourism-related events, programs, or facilities within the city. The grant is designed to attract projects that ultimately become self-supporting and do not require continuous funding. Applicants may request financial support specifically for marketing and promotional expenses that directly enhance the city's tourism sector and lodging industry. Applications are reviewed by the City Council, Convention and Visitor Bureau (CVB), City Attorney, and City Staff to confirm that proposed activities align with tourism promotion and benefit local lodging facilities. Applications are accepted from October 25 to November 15, 2024, covering projects that will take place between January 1 and December 31, 2025. Completed applications, including expense plans or budgets, should be submitted to the designated contact, Darren Eckhardt. Applicants should also be prepared to present their proposal and respond to questions during a City Council Special Meeting scheduled for January 16, 2025. Following review, the City Council will announce funding decisions on January 21, 2025. Note that reimbursements for eligible expenses are not processed until January 31, 2025. HOT funds must comply with Texas state regulations that mandate the promotion of tourism and the lodging industry. Eligible uses for HOT funds include arts promotion, historic preservation, certain sporting events that significantly increase local hotel activity, and advertising efforts aimed at attracting tourists to the city. Funding requests should align with one of these categories to qualify. Additionally, applicants must prove that their events encourage overnight stays in Fredericksburg and are required to monitor and document these stays to verify the impact on the local lodging sector. The application process requires that organizers submit detailed budget plans for how requested funds will be used. Applications are assessed based on prior impacts, such as historical attendance figures and documented hotel bookings from similar events. Applicants should also include a marketing plan that illustrates how the proposed program will draw tourists and generate overnight visits. Should funding be awarded, organizers must acknowledge the city as a sponsor and include the city's official logo on promotional materials. The city also advises that recurring events should work toward self-sufficiency, as annual funding may decrease over time. After the event, a Post Event Report must be submitted by November 14, 2025, detailing expenses and demonstrating compliance with grant conditions, including evidence of hotel bookings directly resulting from the funded event. Supporting documentation, such as receipts and lodging data, should be consistent with the approved budget to secure reimbursement. Failure to submit complete post-event documentation can result in ineligibility for future grants. Certain expenses are not eligible for HOT funding, such as individual stipends, deficit reduction, capital improvements, and promotional materials distributed solely within city limits. Furthermore, funding for arts or historical preservation projects is capped at 15% of the city’s total HOT revenue per fiscal year. The City Council maintains final authority to approve, amend, or deny funding requests based on projected economic impact and adherence to grant guidelines. This policy ensures that the distribution of HOT funds aligns with Fredericksburg's tourism and economic objectives, supporting events that actively contribute to the city’s growth as a destination. Each application cycle requires organizers to reapply with up-to-date documentation, and all activities must comply with state and local regulations governing the use of tourism development funds.