BCTDA anticipates flat occupancy earnings for fiscal year 2025

VISITOR TAX: Occupancy tax revenue, which is collected from overnight stays in Buncombe County and funds the majority of Buncombe County Tourism Development Authority’s budget, is forecasted to remain flat in fiscal year 2025, at roughly $34.3 million. Photo by Caleb Johnson

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.


Thanks for reading through to the end…

We share your inclination to get the whole story. For the past 25 years, Xpress has been committed to in-depth, balanced reporting about the greater Asheville area. We want everyone to have access to our stories. That’s a big part of why we've never charged for the paper or put up a paywall.

We’re pretty sure that you know journalism faces big challenges these days. Advertising no longer pays the whole cost. Media outlets around the country are asking their readers to chip in. Xpress needs help, too. We hope you’ll consider signing up to be a member of Xpress. For as little as $5 a month — the cost of a craft beer or kombucha — you can help keep local journalism strong. It only takes a moment.

Before you comment

The comments section is here to provide a platform for civil dialogue on the issues we face together as a local community. Xpress is committed to offering this platform for all voices, but when the tone of the discussion gets nasty or strays off topic, we believe many people choose not to participate. Xpress editors are determined to moderate comments to ensure a constructive interchange is maintained. All comments judged not to be in keeping with the spirit of civil discourse will be removed and repeat violators will be banned. See here for our terms of service. Thank you for being part of this effort to promote respectful discussion.

One thought on “BCTDA anticipates flat occupancy earnings for fiscal year 2025

Leave a Reply

To leave a reply you may Login with your Mountain Xpress account, connect socially or enter your name and e-mail. Your e-mail address will not be published. All fields are required.