Title
Consider/Discuss/Act on the Grant Committee's Recommendations to Transition the Tourism Grant Program to a Tourism Incentive Program
Summary
COUNCIL GOAL: Goal 1: Direction for Strategic and Economic Growth, Objective 1B (diversify revenue sources and expand tourism to become a "Live, Work, & Play" community).
Goal 4: Financially Sound Government, Objective 4C (balance resources generated by hotel occupancy tax and fees).
MEETING DATE: August 25, 2026
DEPARTMENT: Visit McKinney (McKinney Convention & Visitors Bureau)
CONTACT: Aaron Werner, Executive Director, Visit McKinney
RECOMMENDED BOARD ACTION:
• Staff recommends the Visit McKinney Board of Directors approve the Grant Committee's recommendation to transition the Tourism Grant Program to a Tourism Incentive Program, reallocating the program's $30,000 annual allocation into the Tourism Incentive Fund.
ITEM SUMMARY:
• The Visit McKinney Grant Committee reviewed the Festival & Event Hotel Occupancy Tax (HOT) Grant Program and recommends transitioning it into the existing Tourism Incentive Program. Since 2021, the grant program has distributed $81,750 while generating only 72 verified room nights, a low return on HOT dollars. Staff and the committee recommend moving the program's $30,000 annual allocation into the incentive fund, which currently holds $50,000 and is nearly fully committed for FY26, creating a single $80,000 incentive pool.
No new funding is requested; the change reallocates existing HOT-funded dollars. The consolidated fund positions Visit McKinney to compete for the youth sports, conference, and corporate group business already generating significant room nights.
BACKGROUND INFORMATION:
• Visit McKinney proposes retiring the standalone Festival & Event HOT Grant Program and consolidating its funding into the existing Tourism Incentive Program.
• The grant program is outdated and underutilized. Since 2021 it has distributed $81,750 and generated only 72 room nights, with a single event accounting for 65 of them. By comparison, the incentive program has generated 2,057 room nights across youth sports, conference, and corporate groups on $17,855 in incentives, an estimated $16,317 in HOT revenue at the 7% rate.
• Visit McKinney and its Grant Committee: Carol Sullivan, Katie Scott, Brian Medina, and Visit McKinney staff.
• The Grant Committee reached consensus on June 12, 2026. If approved by the Visit McKinney Board of Directors, the change would take effect in the FY27 budget year.
• Citywide, administered by Visit McKinney using Hotel Occupancy Tax funds.
FINANCIAL SUMMARY:
• No new funding is requested. Beginning in FY27, the $30,000 annual grant allocation would move into the incentive fund, increasing the incentive pool from $50,000 to $80,000.
• Visit McKinney, through its Hotel Occupancy Tax (HOT) budget. No General Fund dollars are involved.
• Hotel Occupancy Tax revenue already budgeted to Visit McKinney.
• This is a reallocation of already-budgeted HOT funds between two Visit McKinney programs and adds no new appropriation. Confirm whether the City's budget process requires a formal budget amendment or interfund transfer.
BOARD OR COMMISSION RECOMMENDATION:
• The Visit McKinney Grant Committee met on June 12, 2026 and recommended that the Visit McKinney Board of Directors transition the Tourism Grant Program to a Tourism Incentive Program by redirecting the $30,000 grant allocation into the incentive fund.