Facing a precipitous drop in hotel room sales and lodging tax revenue, the region will need to recover from a natural disaster in order to avoid an economic one, Vic Isley, president and CEO of Explore Asheville, told the Buncombe County Tourism Authority’s (BCTDA) at its Oct. 30 meeting at the Explore Asheville board room at 27 College Place.
In a presentation forecasting revenue projections for Fiscal Year 2025, which runs from July 2024 to June 2025, Jennifer Kass-Green, Explore Asheville vice president of culture and business affairs, painted a sobering picture of the local tourism industry in the wake of Tropical Storm Helene to 10 board members. Vice chair Matthew Lehman was absent.
Week-by-week hotel revenue comparisons show that revenue dropped 24% the week of Sept. 22 compared to a year earlier and 50% the week of Sept. 29. Revenue fell 44% the weeks of Oct. 6 and Oct. 13, the latest available. Compared to the same month a year earlier, lodging tax revenue plummeted 45% to date in October.
Beyond that, the forecasts are grim. Lodging tax revenue comparing November 2023 to November this year is projected to drop 45%. Monthly forecasts through June show year-over-year declines ranging from 45% in January to 30% in June.
“What we were hearing even prior to Hurricane Helene is that lodging and sales tax collections were already experiencing periods of weakness in 2024,” Kass-Green said. “We were counting on a robust fall season to make up some of that difference.”
The TDA projects the year’s net tax revenues for FY 25 will drop 29%, from $34.3 million to $24.2 million. To make up for some of it, staff proposed pulling $9.2 million from its contingency fund.
Board members Elizabeth Putnam and Michael Lusick asked if that would be enough money to cover the budget shortfall if recovery from Helene takes longer than expected.
“If we underfund we won’t survive,” Lusick said. “In your gut, do you think you have enough to do the job?”
Isley said she thinks so. “You have to put gas in the tank to be able to go somewhere,” she said.
The Board asked to see a revised budget forecast at its next meeting, Thursday, Nov. 21, at 9 a.m. at the Explore Asheville board room.
Board proposes grace period for late fees
The board discussed waiving penalties for businesses that pay occupancy taxes late during the region’s recovery from Helene. The proposal does not waive payments of occupancy taxes; only additional fees that would result from late filing or payments.
The board unanimously approved waiving the occupancy tax penalty fees. The Buncombe County Board of Commissioners will consider the move at its Thursday, Nov. 7, meeting.
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