The City Council on Tuesday backed away from a proposed one percent increase rise in the city's share of the room tax after former mayor Jon Kinsey urged strongly against it.
Mr. Kinsey, the principal owner of the Chattanooga Choo Choo, said a large share of local hotel bookings are by groups. He said those groups closely monitor room tax rates.
He said Chattanooga already has the highest combined room tax and sales tax - 17.25 percent - in the state.
Mr. Kinsey said the local hotel business "is a struggling industry." He said the planned 37-cent property tax hike will cost the hotels collectively over $500,000. He said the bill at the Choo Choo will rise $20,000-$25,000.
He said if the loss in group business due to the room tax hike is 10-20 percent "that would be devastating."
Bob Doak, president of the Convention and Visitors Bureau, said the local combined charge is one of the highest in the nation.
He said a further increase would result in "a public relations nightmare."
Mr. Doak said individual travelers may not notice the local tax charge up front, but when they view the bill "they may say 'Boy, that's a lot. I may not come back here."
Councilwoman Debra Scott, who brought up the issue, continued to argue in favor of it.
She said the city and county could go to five percent each and both are now at four percent. She said a number of cities and counties in the state are higher.
She said the extra income of some $1 million per year would help the city more quickly pay off some tourism-related debt service, such as the construction of the Chattanoogan hotel.
However, other council members opted to leave the rate at four percent.