Nashville's hotel tax collections reach $66M driven by tourism resurgence

The Nashville Tourism and Convention Commission meeting on February 12, 2025, highlighted promising financial trends for the city’s tourism sector, with hotel tax collections showing remarkable growth. The commission reported that hotel tax revenues for the first five months of the fiscal year reached $66.8 million, with $19.4 million allocated for tourism promotion. This figure is not only 40% higher than pre-pandemic levels but also nearly identical to last year’s collections, indicating a robust recovery in the tourism industry.

The meeting revealed that October set a record for hotel tax collections, marking the highest monthly revenue ever recorded. The commission emphasized that these funds are strictly used for reimbursing expenses related to promoting Nashville, ensuring that there is no surplus profit from the hotel taxes.

In addition to the financial report, the commission discussed trends in hotel and short-term rental markets. While hotel demand remained flat in 2024, short-term rentals saw an 18.7% increase in revenue, accounting for 23% of total lodging revenue in Davidson County. This growth reflects a shift in traveler preferences, with more visitors opting for short-term rentals for their convenience and amenities.

The meeting also touched on the performance of luxury hotels, which experienced a 2.2% increase in demand, contrasting with a decline in economy hotel bookings. This trend, referred to as "bifurcation," highlights the growing divide in travel demand, where higher-income travelers are driving growth in the luxury segment while lower-income demand is waning due to inflationary pressures.

Overall, the discussions underscored Nashville's resilience in the tourism sector, with officials optimistic about the continued growth and recovery of the industry. The commission plans to monitor these trends closely as they prepare for the upcoming tourism season, aiming to leverage Nashville's strengths to attract more visitors.