Meanwhile, tourism officials are looking ahead to 2016 and bracing for a new wave of hotel rooms becoming available to tourists. More available hotel rooms could decrease occupancy rates and room rates for hotel owners, which is why hoteliers worked with local state lawmakers earlier in the year to increase the Buncombe County hotel room tax for the first time in decades. The increase from 4 percent to 6 percent was approved, and went into effect in November.
That increase generated no small amount of controversy this year. Some city residents told TDA officials and City Council members that part of the room tax increase should be devoted specifically to city infrastructure projects, noting that increased tourism is taking its toll on streets, sidewalks and other core services. The room rate increase and hotel building boom also played into Asheville City Council elections, which saw one incumbent defeated (Marc Hunt) and three new council members (Julie Mayfield, Brian Haynes and Keith Young) elected, including two who were vocal about slowing city growth, including hotel growth.
The TDA estimates that 1,700 new hotel rooms will become available over the next two to three years, a 25 percent increase over what’s currently available. Some 600 new rooms will come online this year. Stephanie Brown, executive director of the Asheville Convention and Visitors Bureau and a TDA member, underscored the challenge of filling all those new rooms on Wednesday: The TDA’s budget used to attract tourists will increase significantly in the new fiscal year, up roughly $5 million to $13.4 million. But Brown noted that the local market added 700 hotel room from 2007 to now, and that it took about 7 years to “absorb” them and maintain a room rate that could sustain hotels and their employees. (The Buncombe County room rate increased 38 percent during that time.)
(In response to one board member’s question, Brown said that she is tracking the construction progress of the new hotels and that many are in a phase where it’s too early to tell whether they’re on track to open next calendar year. Two new hotels have recently opened in Buncombe County – one near the Asheville Regional Airport, and the other on the property of the Biltmore Estate.)
The TDA’s goal now is to increase demand 6 percent every year for 6 years to keep room rates stable and support hotels, Brown said. “It is really an unprecedented challenge,” she said.
Even with an increased marketing budget, the Buncombe TDA will be looking to make media buys in markets where other big players, with even bigger budgets, will be buying, added Marla Tambellini, vice president of marketing and second in command at the Asheville Convention and Visitors Bureau. (A couple of TDA members mentioned that another major factor in the new year, in terms of media buying, will be effect of the U.S. presidential election – candidates will be buying up lots of ad space.)
Brown said she and Tambellini recently made a trip to New Orleans to visit the TDA’s advertising firm, Peter Mayer. The ad firm will present its plan for how to handle the new supply of hotel rooms in January, Brown said. The essence will be sticking with the marketing plan the TDA has already approved, she said. The revised plan will suggest putting more resources into specific advertising markets, but not begin advertising in new markets until later in the year, she said. (Peter Mayer is estimating an 8 percent increase in room rate for the coming year, she added.)
Brown added that she and Tambellini “hired some help involving communications strategies to support TDA, and I will engage each of you as those plans are formalized.”
Regarding hotel occupancy rates during Asheville’s peak tourism month of October, several TDA members noted that occupancy rates were down while room rates were up. A couple of members noted that the first two weekends of October were especially rainy and dreary. For context, Brown reminded the board that 2013 was the high-water mark for occupancy rates in Buncombe County, and that 2014 saw a 9 percent increase over that, so while October 2015 was down, it will still come in as the second best month on record for occupancy rates.
“Obviously, we don’t want to see a decline,” Brown added.
On the room rate front, TDA member John McKibbon of McKibbon Hotel Group said, “I think we priced a lot of people out of the market” with high room rates, “but they will moderate and demand will grow as rates moderate.”
The TDA heard updates on several other fronts. Here’s a quick look:
Awards: The Buncombe TDA recently won awards from the Hospitality Sales and Marketing International organization for its “Discovery Inside and Out” advertising campaign, as well as its campaign developed in-house to explain the science behind fall leaf color.
Air Service: Brown said a plan to improve service at the Asheville Regional Airport will be released soon. A task force including the airport board and officials from the city, Asheville Area Chamber of Commerce and Economic Development Coalition for Asheville-Buncombe County was convened, and a consultant delivered a 165-page assessment of the market and potential opportunities, she said. It will be presented to the public on Jan. 20. “The rigor of the analysis is impressive,” Brown said, adding that the gist of the report will offer some short-term opportunities that the community can build upon.
Music marketing: The TDA and the Asheville Convention and Visitors Bureau are working on a plan to market the city as a music destination, a focus similar to the one it undertook several years ago to market Asheville as a food destination with its “Foodopia” focus. The CVB “will announce the bones of the music campaign” at a meeting in January, with a full public announcement following in February. Brown offered one hint of what’s to come: the exploreasheville.com website will be home to an online “radio station” that will feature songs by local musicians. The songs will be licensed through an arrangement that’s being worked out now with the Asheville Commercial Music Enterprise, a newly incorporated company.
Tourism product development fund: The TDA each year provides funding to projects aimed at increasing tourism in Buncombe County, and Brown offered two quick updates on that front. The Montford Park Players are somewhat behind on their building project but are making progress, Brown said. And when asked about the status of the Asheville Art Museum renovation and expansion project, Brown said the museum had met a requirement to commence construction by ordered an elevator system and an HVAC system, and that the museum is due to deliver another update soon.
Finally, Julie Mayfield, Asheville City Council’s appointee to the Buncombe TDA, reminded board members that the city is working on three hot issues that pertain to tourism:
Interstate 26 Connector: Mayfield told board members that City Council recently approved a resolution essentially asking the N.C. Department of Transportation to to make the project smaller and less impactful. She said council members hope Buncombe County commissioners will take a similar stand, and that the Metropolitan Planning Organization, the official voice of the region as far as DOT’s concerned, will reflect that unified stance.
Short-term rentals: City Council will take up the continuing conversation of short-term rentals, and whether an accessory dwelling unit can be used as such. A council committee will take up the issue in January, Mayfield said.
Downtown Master Plan revisions: City Council is planning to consider changing development rules that would give council more say over smaller development projects.