May 31, 2023

Today the Buncombe County Tourism Development Authority (BCTDA) Board of Directors received a visitor spending update and FY24 budget presentation from the Finance Committee and Explore Asheville staff. Our region experienced a dramatic recovery over the last 2 years and is now showing signs of more moderate growth. Tourism Economics estimates visitor spending reached $2.7 billion in 2022 and forecasts $2.9 billion in spending this calendar year. That’s excellent news for local business owners and residents who rely on visitors to sustain their livelihoods. Other main takeaways from the May board meeting include the following:

• April lodging occupancy, lodging demand, and visitor spending performance;
• A Finance Committee report and staff presentation on the proposed FY24 Budget;
• Asheville Buncombe Regional Sports Commission (ABRSC) organizational assessment recommendations and next steps; 
• McCormick Field Centennial Restoration & Capital Improvements project request through the Tourism Product Development Fund (TPDF) Major Works Pathway;
• Legacy Investment from Tourism (LIFT ) Fund Committee applications, roles, and responsibilities were shared.

The BCTDA appreciates the viewpoints shared today by local community members on the LIFT Fund, its committee makeup, and workforce housing project support. We live and work here and recognize that our region is not immune to the housing supply crisis that exists across the country. As a result of recent changes to legislation, we are fortunate to have a new pathway for community capital project investments and encourage anyone interested in serving on the LIFT Committee to submit an application by July 7.  

DESTINATION PERFORMANCE

April 2023 hotel occupancy was down three points from 2019 and 2022. Vacation rental occupancy increased by four points from 2019 but was down nine points from 2021 and by six points from 2022. 

Stifled by the pandemic in 2020, April lodging demand fully rebounded in 2022 and has settled above benchmark-year demand, growing a total of eight percent over a five-year period. Also facing a shortfall in the first year of the pandemic, April vacation rental demand gradually increased, resulting in a ninety-one percent increase over the same five-year period. With vacation rental supply outpacing demand, we are beginning to hear conversations about local short-term rentals converting to long-term rentals but have yet to see that appear in AirDNA data reports.

Visitors significantly contribute to Asheville's economy with the benefits of visitor spending distributed across various local businesses, including food and beverage, retail, recreation and entertainment, transportation, and lodging. According to Zartico data, five percent of visitor credit card spending in our community corresponded to $25.3M spent in local businesses so far this fiscal year. This results in a 4% increase from the $24.2M spent by the same percentage of visitor credit card data captured in our community last fiscal year.

PROPOSED FY24 BUDGET

The BCTDA Finance Committee and Explore Asheville staff worked together to develop a budget proposal based on the $37.6M net revenue forecast approved by the BCTDA in March. The forecast stems from revenue projections conducted by Tourism Economics. It also accounts for legislative changes impacting the administrative support contract between the BCTDA and Buncombe County, representing a 5% administrative fee. Historically the administrative fee has been approximately $500k. For FY24, we anticipate the County to charge an administrative fee of $2M. It is also recommended that $2.5M be allocated from the fund balance to the FY24 operating budget.

The BCTDA will vote to approve the FY24 budget at the June 28 board meeting in compliance with state legislation. Public comments are invited at that meeting, in person or virtually via the Zoom webinar platform. 

While lodging shoulders 100% of the marketing and destination product investment, other business sectors reap most of the benefits, with 69% of visitor spending taking place outside of lodging businesses.

In addition, visitor-supported businesses contribute significant property taxes to county and city towards their annual budgets and sales tax that funnels back to state, county, and city coffers.

The 31% of visitor spending that takes place at hotels, motels, vacation rentals, and bed & breakfasts in Buncombe County helps fuel this virtuous cycle of how revenues are generated, how they are invested, and what they help inspire in local spending.

Additional revenue is earned through ad and accommodation sales on the Explore Asheville website, further contributing to destination product investments.

Guided by the BCTDA’s Strategic Imperatives, the proposed FY24 operating budget encompasses investments that support economic development and maintain Buncombe County’s competitiveness as a destination.

The Tourism Product Development Fund (TPDF), forthcoming Legacy Investment from Tourism (LIFT) Fund, and Partnership & Destination Management budget collectively form our destination product investments that approximately match our paid media investments.

ASHEVILLE BUNCOMBE
REGIONAL SPORTS COMMISSION

Today, the Huddle Up Group, a sports tourism consulting company, presented its primary recommendation to redefine the organizational structure of the Asheville Buncombe Regional Sports Commission (ABRSC) from a stand-alone commission to a blended model. The presentation was made to clear up some confusion and misinformation in the community as well as to provide more clarity around the recommendation for BCTDA members.

Following a thorough assessment of 17 phone interviews, 49 surveys, five in-person meetings, six site tours, and Asheville's rating on the Sports Tourism Index, Huddle Up Group believes a blended sports commission offers the best of both worlds, providing financial stability and a pathway to build on past success. The recommendation includes maintaining the 501c3 organizational status for the sports commission in order to operate events, maintain a separate board, advisory group, and strong volunteer pool. Staff would become part of Explore Asheville, creating better alignment and fewer redundancies with limited resources, and would provide a backstop to the sports commission for potential financial risk related to operating events.

Specifics on the potential blended sports commission structure are still to be determined, and no recommendations have been adopted. As a result of listening sessions held earlier this month, a task force with representation from the sports commission, City of Asheville, Buncombe County, Explore Asheville, and UNCA has formed to evaluate Huddle Up Group’s recommendations, potential opportunities, and other options by the end of September. Any change to bylaws or structure would require a vote of the founding members and ample notice to the sports commission. Currently, no date has been set for a vote.

TOURISM PRODUCT DEVELOPMENT FUND (TPDF)

The BCTDA has referred a request for a multi-year partnership with the City, Buncombe County, and the owners of the Asheville Tourists Ballclub for the McCormick Field Centennial Restoration & Capital Improvements Project to the Tourism Product Development Fund (TPDF) Committee. To modernize this landmark facility in need of critical upgrades, the City is requesting debt service of $1.4M per year for 15 consecutive years and a reallocation of the $1.95M grant awarded for the Coxe Ave Project in the FY22 TPDF cycle. If recommended by the TPDF Committee and approved by the BCTDA Board, the project would receive investment through the TPDF Major Works Pathway.

The proposed investment would retain the Major League Baseball affiliation for the Asheville Tourists, generate new revenue through an evolved multi-purpose facility, and catalyze additional mixed-use development that aligns with the South Slope/Southside Neighborhood Vision Plan. McCormick Field contributes an annual economic impact of $9.8M to Buncombe County and these facility upgrades are projected to increase out-of-market attendance growth by over 250% in five years.

LEGACY INVESTMENT FROM TOURISM (LIFT)

The Buncombe County Tourism Development Authority (BCTDA) is seeking candidates for the forthcoming LIFT Fund Committee. This committee will make recommendations to the BCTDA to invest in tourism-related capital projects that will increase patronage at lodging facilities in Buncombe County by attracting visitors, business travelers, or both, and benefit the community at large in Buncombe County. 

The BCTDA is accepting applications until July 7. A nominating committee will review applications, conduct interviews in July and August, and provide their LIFT Committee appointment recommendations to the BCTDA in the August board meeting.

Click below for more information on the LIFT Fund, committee member roles and responsibilities, and the online application.

MORE INFORMATION & NEXT MEETING OF BCTDA

Find documents from the May 31 board meeting HERE >>

THE NEXT BCTDA BOARD MEETING
Wednesday, June 28 | 9–11 a.m.
UNC Asheville Sherrill Center | 227 Campus Drive | Ingles Mt. View Room
Details to be posted HERE >>

EXPLORE ASHEVILLE'S STRATEGIC IMPERATIVES
Delivering Balanced Recovery & 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.