EL PASO, Texas (KTSM) — The City of El Paso announced it will be collecting Hotel Occupancy Taxes on short-term rental properties.

The City Council approved a new action on Tuesday, June 9. Starting 90 to 180 days after this approval, the city will begin collecting Hotel Occupancy Taxes on short-term rentals, allowing time for proper implementation and outreach.

The resolution will create a fairer lodging tax system and is expected to generate about $3.5 million each year. This money will help fund tourism-related projects, according to city officials.

Officials stated that revenue generated through the tax is restricted by Texas law and may only be used for tourism-related purposes, including investments that promote tourism and the
convention and hotel industry.

“We recognize that many short-term rental operators are local residents and small
business owners who have invested in their properties and are working to generate
additional income,” said City Representative Art Fierro. “At the same time, this gives
The City an opportunity to capture visitor-generated revenue that can be reinvested
directly into tourism, arts, events, and infrastructure—helping strengthen our economy
while reducing pressure on all local taxpayers.”

The policy change follows public engagement efforts related to proposed amendments
to the City’s Short-Term Rental Ordinance

“Over the last ten years, the City of El Paso has been the only large municipality in
Texas that does not collect hotel occupancy tax on short term rentals,” said City
Representative Chris Canales. “The action the City Council approved today will ensure
that El Paso has the resources we need to continue to improve the experiences of
visitors and residents alike.”

Short-term rentals commonly operate through online platforms such as Airbnb and
VRBO, which is homes with no shared spaces, and about 81 percent of its local listings are advertised through Airbnb.

Officials reported that Airbnb revenue alone is projected to reach about $23.7 million in 2026.

Hotel Occupancy Tax revenue generated from short-term rentals may be used to
support:

Maintenance, improvements, and expansion of the Convention Center campus

Maintenance and debt service related to Southwest University Park

Funding for local arts and cultural organizations, artists, creative entrepreneurs,
arts projects, events, and festivals

Other tourism-related facilities, programs, and initiatives authorized under Texas
law.

The City estimates the policy will generate approximately $3.5 million annually,
creating a dedicated funding source to support tourism infrastructure, cultural
programming, and destination marketing efforts that drive economic activity
throughout the region.

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