Indy hospitality chief: "We’re at tipping point on taxes."

November 8, 2014

In September 2013, veteran lobbyist Patrick Tamm became president of the Indiana Restaurant & Lodging Association, replacing longtime industry advocate John Livengood. Tamm’s hire came eight months after IRLA was formed by merging the Indiana Hotel & Lodging Association and the Indiana Restaurant Association, both of which Livengood served as president since 1998.

After 14 months on the job, Tamm finds himself wrestling with escalating hospitality taxes, a growing downtown hotel market and a dearth of state tourism marketing funds. He intends to let the voice of his industry be heard on these and other topics at the upcoming General Assembly.

IBJ reporter Anthony Schoettle caught up with Tamm recently to get his take on a variety of industry challenges.

IBJ: What are some of the key things you’ve learned about the state’s restaurant and lodging industry in the last year?

TAMM: I’m learning the importance that restaurants and hotels play in the quality of life in the communities and the growing role they play in economic development and the quality of life. People are choosing where they want to live before they choose where they want to work, and restaurants and hotels are the types of amenities that play a role in those decisions.

IBJ: What’s the biggest issue facing the industry?

TAMM: From an advocacy standpoint, you’re always going to have labor issues, tax and fiscal issues, and growing the state’s tourism effort.

IBJ: Are you lobbying the Statehouse for anything in particular this term?

TAMM: We’re concerned about industry-specific tax increases that do nothing to benefit the industry. We are not interested at all in food and beverage taxes that go toward things like a wastewater treatment plant like what happened in Cloverdale or trips to Italy like what’s happened in Anderson. Going out to eat is not always just a luxury for people.

IBJ: With the recent merger of your organization and your replacement of John Livengood, is the direction of the organization changing?

TAMM: We’re always fine-tuning our organization, improving member benefits and our relationships with related organizations, communications and growing the knowledge of the industry. We have to get more engaged on more fronts. The hospitality industry is one of a great deal of opportunity, but it’s also one of considerable risks. We want to help our members, many of which are entrepreneurs and small-business owners, manage those risks better.

IBJ: There’s been a lot made recently about the city’s travel taxes creeping up. Are the city’s travel taxes too steep, especially with regard to restaurants and hotels?

TAMM: We are at the tipping point. We do rely on group business more than any market in the country, and organizations like Visit Indy use those taxes to attract that business. But meeting planners and business travelers with expense reports take a look at those taxes. Right now, we have absolutely no room for more travel taxes here in Indianapolis.

IBJ: How many hotel rooms do we need downtown?

TAMM: [Visit Indy CEO] Leonard Hoops said it best: You just don’t build a church for Easter Sunday. And you don’t build hotels for peak times. The brands and flags that are being discussed now would be welcome additions. At the same time, some suburban hotel occupancy rates are not the best. That’s where I have some concerns.

IBJ: How many is too many?

TAMM: Our members have different opinions on that, but our push out to the suburbs is where our concern is.

IBJ: Do you favor the idea of a massive hotel on the Pan Am Plaza site?

TAMM: We’ve talked to the city as an association—our hotel general managers and owners. We do have concerns about that. A lot of our concerns are with the details. With respect to the geographical location and the best use of the land, there are good arguments on both sides.

IBJ: What are the specific concerns?

TAMM: It goes back to where the projections on hotel room occupancy and [revenue per available rooms] are, and how does it work in complementing the existing inventory? Some of our members have concerns about how it’s going to be paid for.

IBJ: Some hoteliers have complained that giving tax incentives—especially when it comes from visitor taxes—to new hotel developments is akin to using their own money to compete against them.

TAMM: A lot of our members do have concerns over that. However, if we want this city to continue to grow, there are times our city will need to participate in the redevelopment of certain valuable parcels. From an association standpoint, we don’t have an official position, but that’s a valuable discussion to have.

IBJ: Is there a good mix of local and out-of-state developers in the hotel and restaurant sector?

TAMM: We have some great entrepreneurs in the restaurant scene locally. We have some really creative chefs. We still have some room to grow, but we really have something for everybody in terms of restaurants. On the hotel side, we are blessed with some local owners that are pretty dynamic; we have Schahet Hotels, General Hotel Corp., White Lodging and Focus Hospitality. Those are some really strong operators based right here.•


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