Inspired Minds Art Center submitted a Hotel Occupancy Tax (HOT) Grant application requesting $10,000 in support of the 2026 Buda Arts Festival, scheduled for October 12–17, 2026, in Historic Downtown Buda. The six-day arts festival includes the Plein Air Competition, workshops, artist receptions and activities, a fine art show, art demonstrations, live music, family-friendly activities, art vendors, competitions, awards, and cultural performances.

Hotel Occupancy Tax Grant Program:

The City of Buda's Hotel Occupancy Tax Grant Program provides HOT funds to organizations hosting tourism-related events and activities that are intended to attract visitors to Buda and generate overnight stays at Buda hotels. To qualify, expenditures must comply with allowable uses of Hotel Occupancy Tax revenue under Texas law. 

HOT expenditures must satisfy a two-part test. First, the expenditure must directly enhance and promote tourism and the hotel and convention industry by being reasonably likely to attract visitors from outside Buda. Second, the expenditure must fall within an allowable statutory category. Relevant categories for the Buda Arts Festival include advertising and promotion intended to attract tourists and expenditures that promote the arts.|

Buda Art Festival:

Inspired Minds Art Center established the festival in 2020 as the Buda Plein Air Festival. Since that time, the event has expanded from a single-day painting and music festival into a multi-day celebration incorporating visual art, live music, film screenings, art demonstrations, artisan markets, artist meet-ups, children's activities, and multicultural performances.

The 2026 Buda Arts Festival will take place October 12–17, primarily in Historic Downtown Buda, with plein air painting occurring throughout the 78610 ZIP code. The festival is designed to attract artists, art enthusiasts, families, and visitors while encouraging attendees to experience Downtown Buda businesses, restaurants, and other community amenities.

The City's support of the Buda Arts Festival through HOT funding is consistent with prior years. In 2025, Inspired Minds Art Center requested and was recommended to receive $10,000 in HOT Grant funding for the festival.

The event has an estimated operating budget of $20,000, and Inspired Minds Art Center is requesting $10,000 in HOT Grant funding for applicable expenses. The application identifies the grant funds for advertising and promotion, festival-branded materials for participating artists and volunteers, and costs associated with the artist reception.

The Buda Arts Festival has continued to expand its programming and regional reach. The 2026 festival is expected to attract approximately 2,000 attendees, including an estimated 1,300 local attendees and 700 out-of-town attendees.

The applicant estimates the event will generate approximately 115 hotel room nights, with an estimated 45 hotel rooms booked as a result of the festival. For comparison, the previous agenda item report noted that the festival generated 84 room nights in the prior reporting period, primarily from visiting artists and arts-related visitors.

The applicant's marketing strategy specifically targets visitors beyond Buda, including plein air artists, art enthusiasts, art collectors, tourists, and families throughout Texas and neighboring states. The marketing plan identifies target audiences in Texas, Louisiana, New Mexico, and Oklahoma and proposes advertising through social media, regional online platforms and publications, print media, and radio. Specific proposed outlets include Google Ads, regional art organizations, Eventbrite, Do512, regional publications, Sun Radio, KUTX, and KMFA.

Of the festival's overall $6,500 marketing budget, $4,500 is proposed to be supported through HOT Grant funding, with Inspired Minds contributing an additional $2,000 toward marketing and promotion.

The proposed advertising expenditures are intended to expand the festival's reach outside Buda and attract artists and visitors from regional and out-of-state markets. The remaining requested expenditures support participating artists and festival activities associated with producing and promoting the convention registration and an arts-focused tourism event. 

Funding for all items listed in the grant is eligible for expenses in the following categories: promotion of a destination, registration of conference delegates, and promotion of arts tourism.

The City Council-appointed Hotel Occupancy Tax Grant Committee reviewed the application. The Committee recommends that City Council approve the full $10,000 grant request for the expenses identified in the application.

HOT Grant Requested: $10,000
HOT Grant Committee Recommendation: $10,000

Approval would authorize up to $10,000 in Hotel Occupancy Tax funds for eligible expenses identified in the 2026 Buda Arts Festival HOT Grant application.

Hotel Occupancy Tax revenues appropriated for HOT Grant expenditures would fund the grant.

Pros

• Supports an established Buda event that attracts artists and visitors from outside the community.
• Supports arts and cultural tourism in Historic Downtown Buda.
• Provides funding for advertising specifically intended to reach regional and out-of-state audiences.
• Encourages visitor activity and spending at Downtown Buda businesses, restaurants, and other establishments.
• Applicant estimates approximately 700 out-of-town attendees and 115 hotel room nights.
• Supports the continued growth of the Buda Arts Festival as a regional tourism draw.

Cons

• General budgetary constraints to the Hotel Occupancy Tax Fund.
• Attendance and hotel room-night estimates are projections, and actual tourism impact may vary.

1. Approve the Buda Arts Festival HOT Grant request in the full amount of $10,000 as recommended by the HOT Grant Committee.
2. Approve the grant at a reduced amount and identify the eligible expenses to be funded.
3. Deny the grant request.