Letter: TDA’s shortcomings add to tourism feedback loop

Graphic by Lori Deaton

Compared to its peers, the Buncombe County Tourism Development Authority doesn’t do a particularly good job. Tourist-related employment as a share of the total in the city increased by one-fifth between the 2010 and 2017 data vintages of the Census Bureau’s 5-year American Community Survey. But for North Carolina as a whole, that growth was nearly four times as much.

Compared to its own history, it is doing an even worse job. For its fiscal year 2008-09, occupancy tax income was $6.1 million — at the time, the occupancy tax rate was 2%, so that there was $305 million in occupancy tax-liable revenue from overnight stays. For its fiscal year 2018-19, occupancy tax income was $18.7 million — by then, the tax rate was 6%, so that there was $312 million in occupancy tax-liable revenue from overnight stays.

No growth. Over a decade.

No growth. After TDA expenditures totaling $100 million.

The TDA has successfully pursued its objective of increasing the number of overnight stays. But to the extent that the number of overnight stays has increased over those years, the revenue generated by each stay has fallen enough to offset that growth.

And this is set to continue — not just because of the behavior of avaricious property speculators and hoteliers — but because we are locked in a feedback loop. A householder who struggles to afford their home grabs the opportunity to earn some extra money through Airbnb. By doing so, they increase the supply of accommodation; they find it easy to undercut the hotels on price. The hotels respond by cutting their prices. The hotels, with less money coming in, pay their workers less; and a new cycle begins as those workers decide they have to earn extra money in order to clothe, feed and house their families — and choose Airbnb to do so.

— Geoff Kemmish

Editor’s note: Xpress contacted the Explore Asheville Convention and Visitors Bureau, which manages the occupancy tax collected by the TDA, with a summary of the letter writer’s points. We received the following response from Kathi M. Petersen, director of public information and community engagement: “Thank you for the opportunity to provide accurate information on this subject. According to the N.C. Economic Development Partnership, visitor spending in the state of North Carolina increased 110% between 2000 and 2018. In Buncombe County, the amount of money spent by visitors at our local businesses increased 167%, providing a clear indication of the effectiveness of the Buncombe County Tourism Development Authority’s investment in tourism promotion as an economic development strategy. Similarly, according to information provided by the Buncombe County Finance Department, lodging sales in Buncombe County totaled $101 million in fiscal year 2001 and $425 million in fiscal year 2019.”


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2 thoughts on “Letter: TDA’s shortcomings add to tourism feedback loop

  1. luther blissett

    Correlation is not causation, and measuring from 2000 or 2001 — the Vincent’s Ear days, if you like — is a neat, arbitrary and highly misleading way to generate numbers that don’t reflect an exponential curve. Even the “history” page on the TDA’s own website jumps from 2001 to 2015.

    There’s no perfect place to start the clock, but the bump to 6% in 2015 was when the TDA started rolling in marketing cash and when the C-T did its first reporting on the large profit-sharing and bonus pool for employees, Stephanie Pace Brown (she of the million-dollar house for sale) refused to disclose, and remains non-public to this day. That’s when the feedback loop began.

    It’s even possible to argue that the TDA has succeeded in its mission — but also to say that the TDA’s institutional mission is at odds with the broader needs of the county. Defund the TDA.

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