Ames has been one of the last cities of its size to raise hotel taxes, but now hopes the approved 2 percent increase will help to spur more investment and travel to the city.

The tax increase is intended to help fund the Ames Convention and Visitors Bureau’s marketing in order to keep Ames a regional destination, said Dan Withrow, spokesman for the Hotel/Motel Tax Committee.

“An increase in marketing will bring more groups here, which helps economically,” Withrow said.

“Visitors only spend about a third of their money on the hotel room and spend the other two-thirds throughout the community.”

Other large Iowa cities are building conference facilities and competing with Ames for conventions and conferences, said City Councilman Steve Goodhue.

“Just as companies need to invest in themselves to remain competitive, so does Ames,” said City Councilman Russ Cross. “We need to increase marketing efforts in order to continue our great record of attracting national, international and regional conferences to Ames and Iowa State.”

The state Legislature changed the maximum hotel/motel tax from 5 percent to 7 percent about 20 years ago, said David Maahs, executive director of the Ames Chamber of Commerce.

“We are one of few large cities that haven’t already changed to 7 percent,” Goodhue said. Cross said even though the state code changed a while ago, the City Council was not going to ask for a tax increase until it identified a need for it.

“We actually put it on a ballot about four to five years ago for Iowa State to enhance Hilton,” Cross said. “It was voted down.”

The Ames Convention and Visitors Bureau also plans to develop a $50,000 grant program for students and Ames community members to help start festivals or cultural events, Withrow said.

Cross said the tax will take effect July 1 and the bureau will start receiving that money Jan. 1, 2006.