The Buncombe County Tourism Development Authority (BCTDA) unveiled its proposed fiscal year 2025 budget during its May 29 board meeting. Hotelier HP Patel, who serves as the treasurer for the BCTDA’s finance committee, presented the budget.
Occupancy tax revenue, which is collected from overnight stays in Buncombe County and funds the majority of BCTDA’s budget, is forecasted to remain flat in FY 2025 at roughly $34.3 million.
In previous years, BCTDA paid Buncombe County an administrative fee amounting to 1.5% of the authority’s gross occupancy tax. But starting in fiscal year 2024, the fee increased to 5% and is expected to total $1.8 million for FY 2025.
A state law that was updated in 2022 mandates that two-thirds of the occupancy tax revenue, nearly $23 million for FY 2025, is allocated into BCTDA’s operating budget, which funds tourism marketing, staff salaries and other expenses. The remaining one-third, roughly $11.4 million for FY 2025, is split between the agency’s Tourism Product Development Fund and Legacy Investment from Tourism Fund, which provide grants for tourism-related capital projects.
The reduction in marketing funding has led the agency to supplement the operating budget with the agency’s fund balance, or leftover revenue from prior years. To maintain marketing investments amid lower revenues, the agency’s finance committee recommended a $4.3 allocation from the fund balance, which would increase the FY 2025 operating budget to $27.3 million.
The $27.3 million operating budget represents a decrease over last year’s $27.6 million budget. The proposed budget’s total marketing spending will shrink by roughly $600,000, from $20 million in FY 2024 to $19.4 million in FY 2025. A presentation on the budget notes that net media spending for FY 2025 will be $13.8 million — an 11% drop from last year’s $15.5 million.
However, the proposed budget includes a 7.3% increase for BCTDA salaries and benefits, from $4.1 million in FY 2024 to $4.4 million in FY 2025. Speaking with Xpress after the meeting, BCTDA spokesperson Ashley Greenstein said that the increase in benefits also includes funding for an additional business development position.
A May 29 newsletter from the BCTDA says that lodging sales for FY 2024 have largely kept pace with last year. Hotel occupancy in April was 69%, down 2 percentage points from 2023 and 5 percentage points from 2019. Occupancy for short-term rentals in April reached 52%, down 4 percentage points from 2023 and 2 percentage points from 2019.
The BCTDA board is expected to vote on whether to adopt the fiscal year 2025 budget at its next meeting on Wednesday, June 26.
Such a farce.