May 26, 2021

Buncombe County Tourism Development Authority

TOURISM COMMUNITY UPDATE

Months before the pandemic, local hotel leadership advocated for a change in the way the occupancy tax is allocated in Buncombe County. Those efforts resumed this year, with local hotel leaders pursuing more funding for investment in community projects related to tourism and less funding dedicated to advertising and promotion for Buncombe County, including Asheville. Changing the existing 75%/25% allocation to two-thirds/one-third is the maximum allowable under the state guidelines that govern more than 150 local occupancy tax legislations in North Carolina.

Aware of these potential legislative changes that may be introduced and passed by the North Carolina General Assembly, the TDA presented two budget scenarios for fiscal year 2022 in today’s board of directors meeting. For more details, read on.  

The meeting also included a report on the lodging market in Buncombe County. Local residents who own vacation rentals are continuing to benefit economically from the return of visitors to our community. Details follow.

We thank you for your partnership to help our community thrive again.

The pandemic significantly disrupted travel globally and altered the choices people made when planning their trips. A look at the lodging market for all of Buncombe County over the last five years shows growth in both hotels and vacation rentals, with sharp contrasts in each segment in 2020.

While hotel occupancy was 69% in April (down 7% from the benchmark year of 2019), short-term rentals reached 72% (up 24% from 2019 levels), resulting in nearly equal occupancy levels between the two lodging categories. This trend continues to economically benefit local residents who own vacation rentals,  earning more from the return of visitors to our community for themselves and increasing revenue for area businesses.

The number of available vacation rental property listings in Buncombe County increased 288% over the last five years, while the number of hotel properties grew 26%.

Room demand is the total number of rooms sold or rented. From 2016 to 2020, room demand for vacation rentals jumped 450%. From 2016 to 2019, room demand for hotels grew 13%, then dropped 30% from 2019 to 2020, losing a decade in room demand growth, putting the local hotel community back to 2010 levels.

Last fall, hotel sales in October were widely reported as the “best ever.” Misleading headlines from local media did not consider the reality that hotel/motel revenues were down but vacation rentals were up, resulting in an increase in total revenue from the previous year. Hotels and motels continue to lag in revenue through the fiscal year, down 23% while vacation rentals are up 64%.

For more information on the current status of lodging in Buncombe County, view today's presentation.

As previously reported, the BCTDA Finance Committee, under the leadership of Chair John Luckett and with help from Tourism Economics, undertook a comprehensive process to establish a revenue objective of $27 million for the fiscal year starting July 1. This represents a 9% increase in revenue over actuals in FY 2019 and takes into consideration the continued strength of the vacation rental market and return of interest in hotel stays.

The committee then considered potential legislative changes that, if introduced, will impact the allocation from a split of three-quarters/one-quarter to two-thirds/one-third – a change that local hotel leadership supports. Two proposed budget scenarios were then created.

The benefits of visitors to our community are distributed across many business categories. While the lodging tax provides 100% of the marketing investment, local restaurants, shops, attractions, experience providers, entrepreneurs, outfitters, and breweries, wineries, distilleries and cideries generate significant revenue from visitors to support local employees.

This supports our local economy further, as food and beverage owners then purchase products from local farmers and purveyors. And because more than 70% of Buncombe County’s hotels are owned by locals, there is far less leakage in our economy than in other destinations.

Just over half of the proposed operating budget ($10.8 million under the existing allocation or $10.6 million if the allocation is changed), will be directed to paid media partnerships for advertising and messaging. These marketing dollars will be invested based on our strategic pillars (see below) and aligned with broader community priorities, to grow the value of visitors for our community and influence visitor behavior.

The Board will vote to approve the budget at its June 30 meeting. Public comments are invited through June 29 at 4 p.m.

Deliver Balanced Recovery & Sustainable Growth

Balance resident and visitor needs, recognizing the necessary role that sustainable, long-term growth of travel has in achieving a healthy, collective economy. Focus on the quality of each visit to our community – balancing growth across the seasons, business and leisure travel, and throughout Asheville and Buncombe County.

Encourage Safe & Responsible Travel

Engage residents and visitors with shared values to care for and respect natural, cultural and human resources vital in delivering quality guest experiences. Collaborate with community organizations, local businesses and environmentally focused partners to support the sustainability and growth of our outdoor economy.

Engage & Invite More Diverse Audiences

Extend a genuine invitation to Black (BIPOC) travelers and other diverse audiences including LGBTQ visitors – connecting them with local neighborhoods, businesses and entrepreneurs – creating more opportunities for all to win. Support product development, place making and community connections, enabling new experiences and business opportunities throughout our community.

Promote & Support Asheville’s Creative Spirit

Share stories of creators and makers who help differentiate our destination through food and drink, visual and performing arts, experiences and more. Support product development, place making and community connections, enabling new experiences and business opportunities throughout our community.

Find meeting documents and a recording of the May 26 board meeting HERE >>

NEXT MONTH'S MEETING: 
Wednesday, June 30 | 9 a.m. - 11 a.m.
More details will be posted HERE>>

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.