The Buncombe County Tourism Development Authority forecast a slight growth in revenue in 2024 at its monthly meeting March 23, despite a larger percentage of occupancy tax revenue likely staying in county coffers.
The TDA is on track to pull in $37.6 million next fiscal year, slightly more than this year’s projected $37 million. This anticipated growth comes despite rising inflation and a likely 3.5% administrative fee increase due to the county for administering and collecting the tax, according to a presentation by Jennifer Kass-Green, vice president of culture and business affairs for Explore Asheville.
A recent change in state law allows the county to capture up to 5% of the tax to cover the cost of collecting the revenue. The county’s cut was 1.5%.
During a budget work session March 14, county commissioners indicated to county staff that they would collect the full 5% beginning the next fiscal year, July 1, which could mean $1.3 million more for the county compared with the previous year.
That fee is unrestricted and could therefore go toward any project the Board of Commissioners sees fit, said Tim Love, Buncombe’s director of economic development and governmental relations.
For the TDA, the fee means a smaller piece of the total to work with during a period of relative economic uncertainty, but revenue is still projected to rise in part because of a 6% growth in hotel room inventory countywide in 2023. Seven hotels are projected to open this year for a total of 532 additional rooms.
For context, that still leaves Asheville behind Wilmington; Savannah, Ga.; Charleston, S.C., and others in hotel rooms per capita, according to Kass-Green’s presentation.
The TDA also benefits from a continued rise in visitor spending, according to projections from Tourism Economics, as presented by Kass-Green. Visitors to Buncombe County are expected to spend $2.9 billion in 2023, roughly one-third of which is typically spent on lodging, directly affecting TDA revenue, according to the presentation.
All of this is happening against the backdrop of a projected mild recession in 2023, as reported to TDA board members at its annual planning meeting at the Grand Bohemian Hotel on March 24 by Zeek Coleman, vice president of the Americas for Tourism Economics.
Usually, a 1% drop in gross domestic product would lead to a substantial drop in travel, Coleman said, but because of pent-up demand and the generally strong financial position of many households and businesses, Tourism Economics expects slight growth in the industry in the coming year, he continued.
Employment in the hospitality industry in Buncombe County still lags pre-pandemic levels, which could be a cause for concern, but overall Asheville is well positioned for growth in tourism dollars spent, he said.
New funds, more beneficiaries
The board also discussed at its March 24 planning meeting the framework for distributing more money to nonmarketing endeavors after state law changed in 2022. Instead of a quarter of the total revenue available for community projects, now a third of the money is available for government and private entities that apply for grants. Those grants will be distributed from two funds.
One fund, the Tourism Product Development Fund, has invested almost $60 million in “major tourism capital projects” to “further economic development in Buncombe County” since its inception in 2001, according to documents provided to the board at the planning meeting.
The new second fund, the Legacy Investment from Tourism, or LIFT, Fund, is mandated by the legislature to “provide financial investment for tourism-related capital projects in order to increase patronage of lodging facilities, meeting facilities or convention facilities” and “benefit the community at large in Buncombe County,” according to TDA documents.
Staff presented a working document to the board to help prospective applicants determine to which fund they should apply.
The TDA released program guidelines March 29, and the first application window for the TPDF opens April 12, with staff slated to make funding recommendations to the TDA board in October. The LIFT committee to fine-tune program guidelines is scheduled to be formed this summer, with an application window opening in the fall and recommendations coming to the board in April 2024.
In other news
In an effort to continue to sell Asheville’s brand to travelers, Explore Asheville President and CEO Vic Isley unveiled a new commercial to run in “media markets that matter to Asheville” at the planning meeting March 24.
The commercial showed artists from various creative fields to make the argument that everyone is welcome to stand out in Asheville. Variations will run in 60-, 30- and 15-second time slots.
The commercial was part of a presentation by Isley to board members of five strategic priorities the TDA has for the coming year, shaped by resident surveys conducted by marketing firm MMGY Global.
The latest survey results showed increasing support for Asheville’s tourism industry among residents, although many still have concerns about the impact visitors have on the uniqueness and quality of life many relish.
Chris Davidson, executive vice president of travel intelligence for MMGY Global, highlighted eight key survey insights for the board, which include Buncombe residents’ high sense of pride, including Asheville’s perceived emphasis on inclusivity and diversity of culture and the area’s natural beauty, Davidson said. That pride translates to concern about the preservation of those ideals, according to survey results.
Overall, 84% of residents believe tourism is beneficial to the community, and 52% believe that tourism positively affects their families, according to the survey.
Davidson said the board has an opportunity to better convey to residents the positive impact tourism has on their personal lives, although not all board members agree.
“I’m not sure it’s a good investment of money to try to educate the public on the value of tourism in their personal lives,” Andrew Celwyn, board member and owner of Herbiary, wrote in an email to Xpress. “How about spending that money helping the community instead?”
“I’m not sure it’s a good investment of money to try to educate the public on the value of tourism in their personal lives,” Andrew Celwyn, board member and owner of Herbiary, wrote in an email to Xpress. “How about spending that money helping the community instead?”
Thank you, Andrew! It’s the first boldly intelligent simple and obvious statement I’ve heard from any board member in years. And dang, you didn’t even have to hire a consultant!
I’ve always maintained this TDA “thing” is a pretty good “gig” …if you can get it.
The TDA President makes almost as much as the Asheville City Manager and with a budget 1/5 the size. In fact, she makes much more than our beleagured Water Department Director with both organizations having a similar size budget. Which person has “real resposibility”? I mean, who is the TDA accountable to?
I’ve know sharp 8th graders who could run the TDA. In fact, it could pretty much run on its own on a very small budget with some cookie cutter ads placed in key markets around the country.
And they like to do it up right! Meeting at the Grand Bohemian Hotel ballroom! Maybe they got a big discount.
Don’t get me wrong; there is a place for reasonable (dare I say modest) tourism advertising for WNC. But what the State has set up and the money and perks that are involved, well it doesn’t sit well with one high taxpaying Ashevillian (me) that can’t even have a safe and reliable water system.
You’re absolutely right. And they routinely advertise for Marketing Associates starting at $60k/year while our law enforcement officers start at much less. But hey, baseball and beer and let the good times roll…to hell with teachers, police and branch libraries…
And who the hell did they survey? Who? How many? When? What criteria? Just more TDA B.S.