July 26, 2023

Today at the Buncombe County Tourism Development Authority meeting, board members greenlighted nearly $23 million in multi-year funding for the City of Asheville’s McCormick Field Centennial Restoration & Capital Improvements Project. This investment marks the first debt service project and the largest Tourism Product Development Fund (TPDF) investment ever granted. With today’s decision, the BCTDA has committed $80 million to 46 community tourism projects since the fund’s inception 20 years ago.

In addition to this monumental decision, several important topics were shared and discussed:

• June lodging occupancy;
• Analyses on mid-year lodging performance and hotel performance by comparative markets;
• A recap of FY23 groups sales performance from Explore Asheville’s Business Development and Sales Team;
• A Meetings Database Institute (MDI) presentation on group sales arrivals and data trends for FY24;
• An update on the Black Cultural Heritage Trail from the Partnership & Destination Management Team.

The BCTDA celebrates its 40th anniversary this month. The Authority's achievements of investing in and building community stand on the shoulders of the many board members and community leaders that came before us. We are committed to creating more opportunities for more people to win through tourism over the next 40 years.

We recognize the many ontributions of Kathleen Mosher as our outgoing chair. We are grateful for her leadership and guidance as the Chair of the BCTDA from June 2021 to June 2023. Today we welcomed Brenda Durden as our incoming board chair for the next two fiscal years.

TOURISM PRODUCT DEVELOPMENT FUND (TPDF)

Today the BCTDA approved nearly $23 million in multi-year funding for the City of Asheville’s McCormick Field Centennial Restoration & Capital Improvements Project. This investment marks the first debt service project and the largest TPDF investment ever granted, nearly tripling the $8.14 million invested in the Town of Woodfin’s Greenway & Blueway in 2022.

The project’s total cost with interest over the life of debt service is $55.6 million. The City of Asheville requested $22.95 million from the Tourism Development Authority, 41 percent of the total project cost, through the TPDF Major Works Pathway. This request reallocates the Coxe Avenue Green Street grant awarded in the 2022 TPDF cycle and incorporates debt service of $1.4 million annually for 15 years.

With today’s decision, the BCTDA has committed $80 million to 46 community tourism projects since the fund’s inception, with $41.6 million, or more than half, invested in City-owned or operated amenities. This seminal investment falls on the 20th anniversary of the TPDF and the 40th anniversary of the BCTDA, including the creation of the lodging tax.  

DESTINATION PERFORMANCE

Hotels witnessed a 76% occupancy this June, down six points from 2019, four points from 2021, and one point from last year. June vacation rental occupancy remained flat from last year at 65%.

MID-YEAR LODGING PERFORMANCE

Last month we discussed a slowing of the market precipitated by national economic trends and local headwinds from public safety. This month we have taken a deeper look into year-over-year data from 2019 to June 2023 to determine other key findings:

• AVL air passenger counts continued to rise 21% through May 2023, signaling fewer overnight visitors from drive-in markets.
• The Asheville City Council’s hotel moratorium from September 2019 to October 2021, in addition to the pandemic-related travel behavior shift, led to an exponential growth of both vacation rental demand and supply far exceeding that of hotels.
• Buncombe County was the comparative market leader for 2022 year-end performance in hotel occupancy, average daily rate, and RevPAR—the predominant health metric for the hotel industry. Six months into 2023, we are now lagging behind the counties of Savannah, Charleston, and Greenville in occupancy, and behind the counties of Savannah and Charleston in RevPAR.

Occupancy data is valuable for our entire community as it’s a leading indicator of destination performance. Over the past few months, our hotel and vacation rental occupancies have decreased by 5% from the year-end of 2022. As nearly 70% of visitor spending takes place outside of lodging facilities, we are now witnessing the implications of this softening on other local businesses such as restaurants, retail, attractions, galleries, tour operators, entertainment venues, and our local artists. This also negatively impacts sales tax collections our local governments rely on to provide services to area residents.

We recognize that this data does not include July and October, the highest-performing months for Asheville and Buncombe County. Additionally, 269 new hotel rooms are slated to open this fall, so we will closely monitor occupancy throughout the end of this year.

BUSINESS DEVELOPMENT & SALES

Business development is guided by Explore Asheville’s strategic imperatives and principles focused on creating new business and improving the quality of the visit, pursuing off-peak business, and attracting business aligned with our economic development sectors and community assets. Reflecting on FY23, our team booked more than 75,000 roomnights distributed through more than 500 definite leads across our nearly 100 lodging partners. A "roomnight" is an industry term defined as one hotel room occupied for one night, regardless of how many guests stay in the room. The 75,000 roomnights generated by the business development team translates to $71 million in direct spending in local businesses throughout our community from nearly 400 events.

FY24 BUSINESS ARRIVALS 

Meetings Database Institute (MDI), a strategic data management and solutions firm specializing in hospitality and meetings, presented group arrivals and contracted business for FY24. Data collected from Explore Asheville’s customer relationship management (CRM) software found the following key points and trends to monitor when gauging future business:

• Sports and athletics events, booked by Explore Asheville or in collaboration with the sports commission, are the number one producer of roomnights followed by weddings, medical/life sciences, and environmental/energy group meetings, which generate 54% of group bookings.
• Asheville and Buncombe County produce a regional draw, with 65% of booked groups and nearly 50% of roomnights contracted within North Carolina. With SoCon headquarters based in South Carolina, those contracted roomnights are attributed to that state. The Mid-Atlantic area and Georgia also show significant roomnight impact.
• Asheville and Buncombe predominately attract smaller business groups between 10 and 50 people with 66% of booked groups driving 24% of all roomnights.
• The volume of new business coming to Asheville and Buncombe County in FY24 is eight times higher than repeat business.
• Group arrivals are heavily weighted in the first half of FY24, with peak arrival taking place in July, September, October, and November.
• Roomnights are spread across all days of the week, 61% of which include Sunday to Thursday evenings; a 2% increase in weekday business from FY22.

BLACK CULTURAL HERITAGE TRAIL

In 2018, the River Front Development Group (RFDG) proposed a trail connecting historic Black communities in Asheville through the TPDF. Now known as the Black Cultural Heritage Trail, the project interprets how Asheville’s Black population negotiated landscapes of unequal power to build resilient communities and foster social change. An advisory committee comprised of 18 community members has been integral in identifying key themes and providing guidance.

The trail will consist of 15 stops with 21 panels divided among three sections of town including downtown, the Southside neighborhood, and the River Arts District. The trail is expected to take approximately two and a half hours to complete in its entirety.

This summer RFDG, historians, and content experts are reviewing the draft panel text while Explore Asheville staff gathers hundreds of archival photos and develops additional digital trail content. Interpretive panels and wayfinding signage will be installed with an expected launch of the trail to take place this November.

MORE INFORMATION & NEXT MEETING OF BCTDA

Find documents from the July 26 board meeting HERE >>

THE NEXT BCTDA BOARD MEETING
Wednesday, August 30 | 9–11 a.m.
The North Carolina Arboretum | 100 Frederick Law Olmstead Way
Details to be posted HERE >>

EXPLORE ASHEVILLE'S STRATEGIC IMPERATIVES
Delivering Balanced & Sustainable Growth | Encouraging Safe & Responsible Travel |
Engaging & Inviting More Diverse Audiences | Promoting & Supporting 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.