June 30, 2021

Buncombe County Tourism Development Authority

TOURISM COMMUNITY UPDATE

The 2022 fiscal year budget (starting July 2021) was approved by the Buncombe County Tourism Development Authority at its final meeting of the current fiscal year. While the approved budget must coincide with the current 75%/25% split between marketing and product development, the staff stands ready to make changes to the budget with board approval once state legislation moves to introduce and approve the split to two-thirds, one-third.

• Although the occupancy tax shoulders 100% of the destination marketing investment for Asheville and Buncombe County, lodging partners garner just over a quarter of the visitor spending at 27%. Local shops, restaurants and breweries, recreation, entertainment and tour providers and transportation companies reap 73% – the lion’s share of visitor spending rewards.
• Over the course of the life of the Tourism Product Development Fund, 39 projects have benefited from $44 million in investments. Projects such as transportation and infrastructure improvements in the River Arts District and renovations to the historic YMI Cultural Center are among the beneficiaries of this grant money. (See an update on these projects below.)
  
• For the first time since the pandemic, hotel occupancy in May eclipsed vacation rental occupancy, though total sales for hotels continued to lag by 8% year over year.
• More than 70% of hotels in Buncombe County are owned by locals. That means more dollars stay local in our own community.
• This local economic activity supports our community further. For example: Hotel owners pay property taxes and employ local residents. Food and beverage owners purchase products from local farmers and purveyors. Local businesses use the services of local accountants, attorneys, and mechanics. Their employees visit local doctors, dentists, salons, and massage therapists, and their children take lessons from local piano teachers. They all support local nonprofits and attend fundraisers and do volunteer work. The benefits go on.

On the subject of volunteer work: Himanshu's service as Board Chair ended with this meeting as his term with the Buncombe County TDA expires in August. Next month this newsletter will come from our newly appointed chair, Kathleen Mosher. (See more below.)

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

While hotel sales are on the rise, total hotel occupancy tax revenue still lags 14% year over year. Hotel occupancy for the month of May 2021 reached 71%, up significantly from 23% in April 2020, though still down 8% from April 2019 levels.

Short-term vacation rentals reached 69% in May 2021, up 8% from the benchmark year of 2019. This continues to be good news for local residents owning vacation rentals and earning more and benefiting from the return of visitors to our community.

It also marks the first month since the pandemic began that hotel occupancy eclipsed vacation rental occupancy.

A budget ordinance presented by BCTDA Finance Committee Chair John Luckett was approved today, which adopts the FY22 operating budget in the amount of $20,369,690, the Tourism Product Development Fund administrative budget of $440,000, and the earned revenue budget of $200,564.

Just over half of the operating budget will be directed to paid media partnerships for advertising and messaging. These marketing dollars will be invested based on our strategic imperatives and aligned with broader community priorities to grow the value of visitors for our community and influence visitor behavior.

Budgets were developed using the current occupancy tax allocation mandating that 75% of the tax is used for tourism promotion and 25% for projects expected to increase visitation to the community. However, local hotel leaders have advocated for a change in the split for nearly two years, which would increase funding for investment in community projects related to tourism and decrease funding dedicated to advertising and promotion for Asheville and Buncombe County.

Potential legislation would shift the occupancy tax allocation from a split of three-quarters/one-quarter to two-thirds/one-third – the maximum allowable under the state guidelines that govern more than 150 local occupancy tax laws in North Carolina. Should this legislation be introduced and approved by the General Assembly, the BCTDA will be ready to implement the change.

Proven thought-leaders with destination experience. Data driven with demonstrated ability in work related to Explore Asheville’s strategic pillars. Media buying power and the ability to meet financial policy requirements. Those were the key criteria for the ideal advertising agency partner that Explore Asheville sought and found in MMGY Global, as announced in today's BCTDA Board meeting.

Recognized as one of the world’s leading integrated marketing communications companies specializing in the travel, tourism, and hospitality industry, MMGY was selected in part because of their experience balancing the needs of residents of the destinations they serve with that of visitors. In total, 14 agencies submitted proposals (none from local firms).

The Kansas City-based agency will open an Asheville office staffed by a local marketing professional with knowledge of our region and the travel industry. MMGY holds a distinguished and diverse portfolio of current and past destination clients, including the states of Colorado, South Dakota, Rhode Island, and Texas; The British Virgin Islands, Costa Rica, and Victoria, British Columbia; and the cities of Bloomington, Breckenridge, San Jose, Santa Monica, and Corpus Christi.

Updates on two projects previously awarded community grants by the Buncombe County TDA were presented at today's meeting:

• In 2014, 2015 and again in 2017, the BCTDA awarded a total of $7.1 million from the Tourism Product Development Fund to the City of Asheville’s Riverfront Destination Development project in the River Arts District. The project, now complete, open to the public, and frequented by local as well as visiting families, individuals, and teams on foot, skates, bicycles, and other multi-modal transportation, features greenways, sidewalks, trees and landscaping, road improvements, wayfinding, and public art. A request was made for disbursement of the final $3.7 million to the City for the project, which the BCTDA approved.
  
• Leadership with the YMI Cultural Center provided an update on a renovation project for which BCTDA awarded funding of $800,000 in 2018, waiving the matching funds requirement. A request for a contract amendment to reflect the updated scope of the project – including additional details resulting from the design and construction planning process conducted by the Self-Help Real Estate Development Team and Weaver-Cooke – was approved. Renovation project goals in addition to protecting and enhancing this historic landmark for greater community engagement include upgrading and modernizing the building’s systems, equipment and finishes, and increasing meeting and event capacity, maximizing income-generating potential.

These community grant projects are in alignment with all four of Explore Asheville's strategic priorities, particularly those related to balanced recovery and sustainable growth, and engaging and inviting more diverse audiences.

The final day of Fiscal Year 2021 also meant the changing of the guard at the Buncombe County TDA. The Nominating Committee led by Vice Chair (and former Chair) Gary Froeba announced a slate of officers to head the authority, which was unanimously approved. Our thanks to the following for graciously accepting this responsibility, effective July 1 (shown below, from left):

• CHAIR: Kathleen Mosher, Vice President of Communications for The Biltmore Company
• VICE CHAIR: Brenda Durden, Chief Operating Officer for Asheville Hotel Group
• TREASURER (of the nonprofit): Leah Ashburn, President & CEO of Highland Brewing Company
  

We're grateful for the tireless dedication of our outgoing officers, in particular Chair Himanshu Karvir, who has served on the Buncombe County TDA for six years, completing his second three-year term this August.

Find meeting documents and a recording of the June 30 board meeting HERE >>

NEXT MONTH'S MEETING: 
Wednesday, July 28 | 9 a.m. - 11 a.m.
More details will be posted HERE>>

JULY 21: Partner Salon - "Optimize Your Presence on ExploreAsheville.com"
AUGUST 3: Sustainable Tourism Update Webinar
AUGUST 4: Summer Social & Sustainability Resource Fair

Watch for details!

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.