July 27, 2022

By now you've heard the good news that the long-awaited change in occupancy tax legislation in Buncombe County became law earlier this month, increasing funding for investment in community capital projects.

Effective July 1, the formula for occupancy tax allocations shifted from a split of 25% for investment in community projects and 75% for tourism promotion to a split of one-third/two-thirds. At this month's meeting of the Buncombe County Tourism Development Authority, a budget amendment was approved that complies with the new law and its effective date.

Local hotel leaders, county and city officials, and our local delegation led by Senator Chuck Edwards advocated for this change. More funding is now available for more community amenities that are enjoyed by residents as well as visitors – something worth celebrating for all of us who live here.

Speaking of celebrations: As part of a group sales update at today's BCTDA meeting, Explore Asheville's VP of Business Development Marshall Hilliard announced that the sales team exceeded their goal for the fiscal year that ended in June by booking 65,123 roomnights. A "roomnight" is an industry term defined as one hotel room occupied for one night, regardless of how many guests stay in the room. 

A key takeaway here is that 65,123 roomnights translates to $72.82 million in direct spending with local businesses throughout the community. And that's how Explore Asheville works collaboratively with local partners to inspire visitors to choose Asheville for their leisure and business travel, helping to support local businesses across all sectors and create a healthy economy for all who live, work and play here.

LODGING MARKET OVERVIEW

Travel industry researchers are seeing a cooling of the market, much of that attributed to concerns about the economy and high prices at the pump and grocery store. Locally, the pace of growth in June slowed for lodging partners – down three points compared to 2021 for hotels; down 10 points for vacation rentals. 

Occupancy stats are a leading indicator of destination performance. The softening of those numbers means impacts will start to be felt by other local businesses: restaurants, breweries, shops, attractions, galleries, experiences, tour operators, outfitters, entertainment venues, and so on. With lodging representing 30% of total visitor spending, it's also for the beneficiaries of the other 70% of visitor spending that we are continuing our watchful eye on trends.

The following graphs with information from STR and AirDNA provide insights, particularly as they pertain to the continued growth of whole-house vacation rentals.

JUNE LODGING OCCUPANCY

Occupancy = Percentage of rooms occupied  

AVERAGE OCCUPANCY BY LODGING TYPE

AVERAGE DAILY RATE BY LODGING TYPE

ADR = Room revenue divided by rooms sold, displayed as the average rental rate per room.
For vacation rentals = Average daily rate charged per booked entire-place listing,
including cleaning fees but not other service fees or taxes

NUMBER OF PROPERTIES BY LODGING TYPE

TOTAL LODGING SALES - FISCAL YEAR 2022

Source: Buncombe County Finance

GROUP SALES UPDATE

As leisure travel slows somewhat, group business is growing. Even with the challenges of Delta and Omicron variants (coupled with a team member out for parental leave), the Explore Asheville sales team exceeded their goal of 65,000 roomnights for FY22, which ended June 30. A key takeaway: 65,123 roomnights translates to $72.82 million in direct spending with local businesses in the community.

FY22 ROOMNIGHT GOALS TO ROOMNIGHT ACTUALS

As important as achieving the roomnight goal: when rooms are booked. With peak visitation to Asheville taking place on weekends, it's weekday business, such as for meetings, conferences, incentive trips, and the like, that the sales team is striving to attract.

The following graph shows remarkable progress in increasing midweek roomnights versus weekend roomnights, comparing the four-year average for FY18 through FY21 to that achieved in FY22.

WEEKEND / MIDWEEK ROOMNIGHT COMPARISON

Roomnight = A statistical unit of occupancy in the hospitality industry.
One hotel room occupied for one night is a roomnight, regardless of how many guests stay in the room.

A pair of videos featuring interviews with local hospitality leaders and showcasing Asheville's independent spirit, scenic beauty, fresh mountain air, and unique spaces for group gatherings, is designed to inspire those in search of locations to hold meetings, executive retreats, conferences, and incentive trips. Produced in partnership with Northstar Travel Group, the videos are promoted prominently on Northstar's websites and social channels, and shared to event planners and meeting and incentive professionals via dedicated emails and in the daily Meeting News newsletter.  View here >>

Find documents from the July 27 board meeting HERE >>

NEXT MONTH'S MEETING
Wednesday, August 31 | 9 a.m.–11 a.m.
Center for Craft* | 67 Broadway Street | Asheville
Details to be posted HERE >>

* Once a quarter, the Buncombe County TDA will meet at other venues in our community, starting next month. In August the meeting will be hosted at Center for Craft, a recipient of a Tourism Product Development Fund grant. Hosting our meetings at these locations will allow the public and the board to see the TDA’s investment in community projects at work. See the full schedule of BCTDA meetings for FY23 HERE, approved at the July 2022 meeting of the authority.

EXPLORE ASHEVILLE'S STRATEGIC IMPERATIVES
Deliver Balanced Recovery & Sustainable Growth | Encourage Safe & Responsible Travel |
Engage & Invite More Diverse Audiences | Promote & Support Asheville's Creative Spirit

Established by state law to administer the occupancy tax paid by overnight visitors according to the enabling legislation, the Buncombe County Tourism Development Authority is a public authority with a public purpose to enhance the economic vitality of Buncombe County. It is led by 11 local, appointed volunteers (two of whom are ex-officio members) who provide professional expertise to ensure the effective use of the tax to benefit our community and the people who live here. BCTDA meetings are open to the public.