ASHEVILLE – Buncombe County commissioners passed a lodging tax increase Tuesday on a 4-3 vote that split parties and intensified arguments over how to tax tourists.

Voting yes for the 50 percent rise in the hotel occupancy tax were two Democrats (Chairman David Gantt and Commissioner Ellen Frost) and two Republicans (Vice Chairman Joe Belcher and Commissioner Mike Fryar).

Commissioners voting no were Republican Miranda DeBruhl and Democrats Holly Jones and Brownie Newman.

The split reflected arguments building in the community over the tax that is paid by hotel guests and controlled by an appointed body whose majority are hoteliers, the Buncombe County Tourism Development Authority. The increase, which will go into effect in November, is expected to generate an additional $5 million, bringing total tax revenue to $14 million. The authority will spend all of that on marketing and projects to boost hotel business.

Hoteliers said the 4 percent tax needed to be raised to 6 percent because of the large number of new hotels being built in the county. The money would be used for more marketing. That would bring more hotel guests and help fill the growing number of hotel rooms, they said.

In voting yes, Gantt pointed toward tourism’s central role in the economy. Tourists spent $1.7 billion in the county in 2014 and supported 25,000 local jobs, according to authority numbers.

“I just think it’s a huge economic engine we have to respect,” the chairman said.

But opposing commissioners, such as Newman, said a bigger piece of the tax revenue should go toward streets, sidewalks and other public projects that help residents. Currently, 25 percent of the tax revenue goes toward projects that boost hotel business. Some of those also have a public benefit. They include sports fields and U.S. Cellular Center renovations.

“I think there would be very strong community support for this if there was a more equitable distribution,” said Newman, a 2016 candidate for chairman.

Members of the public spoke for and against the tax increase and included residents, small business owners and a representative from the Grove Park Inn, the region’s second biggest employer.

The local hotel room tax was created in 1983 by the General Assembly and set at 2 percent. Over the years, the state legislature raised the tax until it reached 4 percent. Hotel guests pay the tax on top of regular sales tax.

Most recently, hoteliers asked lawmakers in Raleigh to bump up the tax again and to make other changes. Those included forbidding for-profit entities from getting project money and increasing the authority by two members. According to the new law, county commissioners had to take the final vote on raising the tax.

Already, 31 counties around the state have six percent occupancy taxes. Fryar and Belcher said they supported the tax hike because it wouldn’t be paid by local property owners.

“We’re talking about money that is just laying there,” Fryar said.

The Republican commissioner rejected the idea that pressure should be put on hoteliers or the legislature to send more of the money toward Asheville and its downtown.

Belcher said local governments such as the county or Asheville could apply for project money. Authority staff said they are creating a process where applicants such as local governments with large projects of more than $5 million can apply any time of year instead of following a more rigid timeline currently used. They can also get special consideration for multiyear funding.

Belcher used the example of the $2 million in room tax money that went to the Enka ballfields.

“If that application is made to the Tourism Product Development Fund and they agree to it, then we don’t have to fund it on the backs of property tax payers,”

But DeBruhl said the legislation didn’t guarantee special consideration for local governments. Giving more attention to public projects was a promise by the authority but wasn’t part of the law, she said.

“What is in writing is a tax increase on our friends and family who come to visit us. And that’s upwards of $5 million. And I don’t want to have any part of it.”

Frost said she, too, wanted more money for public projects. But she said the legislature has been hostile to Asheville and the county, passing laws that limited their authority. The current law, which would increase project money, was probably the best they would get, she said.

“I think saying the legislature is going to do better for us — it’s not going to happen, sadly.”

Jones criticized the legislative process that led to the tax increase, calling it an “end run.” Local elected officials had approached the authority, asking that it help them change the law to allow some of the money to go toward nontourism projects such as affordable housing. But tourism officials instead worked with legislators to increase the tax for the hotel business.

Jones, a candidate for lieutenant governor, said hospitality meant being friendly and kind toward guests.

“It’s clear the people of this community and the people elected to represent them were not treated very hospitably.”

ASHEVILLE – For eight years, Mike Pelz relied on Asheville Regional Airport for business trips that numbered 30-60 a year as he jetted up and down the East Coast.

Greenville-Spartanburg International Airport — to the bane of airport officials in Asheville — gets his business now, Pelz said, because air fares are cheaper.

“The price difference is often huge,” said Pelz, a Brevard resident who works in development and sales for an Asheville-based technology company.

But what is true in his case often isn’t so for other travelers who might be overlooking deals in Asheville.

First-quarter data provided by the U.S. Department of Transportation show average domestic fares for flights originating from Asheville were lower than those from Greenville, Charlotte Douglas International Airport and Hartsfield–Jackson Atlanta International Airport.

Flights from Asheville cost an average of about $411 per ticket. Atlanta’s was roughly $427. GSP’s average fare was about $429. And Charlotte’s was roughly $466.

Air-fare costs — how they are set, how Asheville can overcome its perception problem as an airport of higher fares and whether options exist for adding routes — could become a more discussed topic beginning next week. Airport and Buncombe County Tourism Development Authority officials have hired a consultant to analyze possibilities for adding routes, flights and carriers.

Rhett Morgan, director of Ailevon Pacific, will earn $43,000, said Stephanie Brown, executive director of the Asheville Convention and Visitors Bureau and a Greater Asheville Regional Airport Authority board member.

Another $7,000 will be spent to access data from the Virginia-based Airline Reporting Corporation. Airport officials will pay $18,750 and tourism authority officials will pay $31,750, said Tina Kinsey, spokeswoman for the Asheville airport.

Morgan said the federal data showing Asheville had the lowest average fares among the four airports “is a great example of perception vs. reality in the local community.”

Introduction and growth of Allegiant Air, the Las Vegas-based “ultra-low cost” carrier, into the Asheville marketplace has helped reduce average fares, Morgan said.

Even when other airports offer cheaper fares, traveler Greg Ness said he always flies out of Asheville because it’s convenient. He went to Denver last month and left on Saturday for a trip to Nevada.

More significantly, the costs even out when Ness considers everything he’s spending on travel.

“Obviously, I’ve looked at Charlotte, Greenville and Atlanta,” said Ness, an Asheville resident who is assistant general counsel at FLS Energy, a solar-energy company in Asheville and a co-owner and general counsel of Noble Cider, an Asheville-based company that makes hard apple cider.

Prices rise and fall

How airlines price tickets “is a really gray area,” said Morgan of Ailevon Pacific.

The firm’s U.S. headquarters are in Dallas and its Asia-Pacific business headquarters are in Sydney, Australia.

When he started his career in the price department at Atlanta-based Delta Air Lines, Morgan said people would often ask how companies determine air fares.

In truth, they consider multiple factors.

One is whether the market the airline serves is new or mature.

“New service usually comes with lower fares,” Morgan said. That could mean a new route or a new nonstop flight. “The time period for those lower fares differs from airline to airline.”

Prices also rise and fall according to peak and off-peak times of the day, week and year, he said.

For example, very early morning and very late night flights will be cheaper than rush-hour flights.

And airline industry officials consider Sunday, Monday, Thursday and Friday peak travel days, Morgan said. So traveling those days generally will be more expensive than Tuesday, Wednesday and Saturdays.

The nature of competition in a market also affects ticket prices, he said. Different types of airlines have different types of pricing techniques.

Asheville customers are fortunate to have access to the ultra-low cost airline, Allegiant, Morgan said.

Spirit Airlines of Florida is another company in that category.

New York’s JetBlue AirWays and Southwest Airlines in Dallas are “low-cost” carriers, he said. Neither of those companies offer flights in Asheville.

The “legacy” airlines consist of American Airlines, Delta and United Airlines. All three operate at the Asheville airport.

“Depending on who’s in the market (also) drives pricing,” Morgan said.

High and low oil prices, too, often equal high and low air fares, he said.

Airlines make the call

Finally, ticket prices change as passengers scoop up seats at varying fare levels. An empty plane equals low ticket prices. The fuller a plane gets, the higher the prices climb.

“It’s supply and demand,” said Lew Bleiweis, the Asheville airport’s executive director. “The more flights are full, the more flexibility airlines have to charge (higher) for those seats.”

Local airport officials do not affect air fares. Prices are the sole purview of airline companies.

The Federal Aviation Administration allows individual airports to assess a “passenger facility charge” up to a maximum of $4.50 for each person who boards a plane.

That money may be used only for FAA-approved projects that increase safety, security and capacity; reduce noise; and enhance airline competition.

Savvy shoppers might also notice fluctuations spanning minutes, hours and days when searching online for the best airline deals, Kinsey said.

“Airfare buyers who are price-driven will shop, watch, wait — and book when the price is where they need it to be,” Kinsey said.

She added that based on fares and the high number of travelers using the Asheville airport, “it appears that they are finding airline tickets from AVL that work for their budgets.”

Kinsey has a point.

The airport set a record for passenger travel during fiscal year 2015 when more than 400,000 people boarded commercial flights at the airport, a 9 percent increase over the prior year.

But Pelz, the frequent business traveler from Brevard, also has a point.

A two-day Citizen-Times survey last week of seven online ticket companies to three different destinations for different dates in September and October showed Asheville to be more expensive than Greenville, Charlotte and Atlanta in each case. The chosen routes reflected business and family travelers.

A trip to LaGuardia Airport in New York on Sept. 15 and returning on Sept. 17 could have been made nonstop from Atlanta and Charlotte for $188 and $185, respectively. From Asheville and Greenville, the fares would have been $391 and $333, respectively, with one stop.

A trip for two to Denver from Sept. 19 to Sept. 26, showed Atlanta again to be cheapest at $396 on a nonstop flight. Charlotte and Greenville each cost $687, with one stop. And Asheville cost $792 with one stop.

Departing from Atlanta was lowest again on a trip for two to Fort Myers, from Oct. 7 to Oct. 13. It barely beat out Asheville with a $176 nonstop fare.

But Allegiant doesn’t fly that route on Tuesdays, Thursdays, Saturdays and Sundays. So the return trip would have had to be on Oct. 14. That trip cost $183 and was nonstop.

Flying out of Charlotte and Greenville would require one stop both ways and cost $508 and $540, respectively.

Presented with those scenarios, Kinsey emphasized that each of those fares represented only points in time — and reiterated that prices constantly change.

“It is a good idea to check AVL first,” Kinsey said. Plus, flying from Asheville ultimately could help land the airport more routes.

“The more regional travelers support local air service, the stronger our options will be – and the likelihood of successfully attracting additional air service is greater.”

0) { %

0) { %

0) { %