ASHEVILLE – Where some saw all dollar signs in a new report showing Buncombe County’s booming tourism industry is roaring with record noise, others saw bills to pay.
Bills for greater police protection. Bills that come with more wear and tear on roads. Bills to cover water and sewer costs, along with other basic services.
It’s a quandary for tourism towns and counties like Asheville and Buncombe — and one worth exploring alongside the celebration of the tourism industry that Monday’s data release spurred.
Adam Sacks, an economist who specializes in tourism and president of Pennsylvania-based consulting firm Tourism Economics, presented his findings before 200 people at the Lioncrest building on the Biltmore Estate.
“Only one tiny piece of our ‘ecosystem’ was represented in that room, and those were the people benefiting financially,” said Franzi Charen, who co-owns Hip Replacements, a downtown clothing store and is director of the Asheville Grown Business Alliance, a network of independent businesses that provides resources and support to local merchants.
“The presentation was based purely on economic numbers and didn’t take into account any social or environmental impacts tourism has,” said Charen, who also attended the county Tourism Development Authority‘s annual meeting Monday.
Those concerned about an Asheville and Buncombe County economy too reliant on tourism say the system could collapse if another destination becomes more popular or a natural disaster hits.
They also say that tourism raises housing prices, a phenomenon that makes the area’s existing affordable-housing crisis even worse.
Charen and others would like to see an assessment of tourism’s impact on the region’s social and environmental systems.
Others have called for a portion of the hotel occupancy tax, which currently is 4 percent charged to guests, to be used to pay for local government services.
Data released at the meeting show new records across an array of categories: visitors, hotel occupancy and average room rates, to name just a few.
Visitor spending in 2014, for example, reached $1.71 billion, a 4.6 percent increase over the year before. Total visitors hit 9.9 million last year, a 3.8 percent increase. The county’s hotel occupancy rate leapt to 72.5 percent in fiscal year 2015, up from 67.3 percent.
A second report also unveiled on Monday found that spending to advertise a destination, such as Buncombe, helps that region build transport networks, raise the quality of life, attract strategic events and recruit investors.
That spending comes from tourism development authorities like Buncombe’s and convention and visitors bureaus like Asheville‘s throughout the nation.
Many in the local business community cheered Monday’s news, saying tourism composes a significant aspect of Asheville’s identity – and is integral to the expansion of their own companies.
“It’s part of Asheville’s ecology; it has to be,” said Emi Kubota, a native of the city and vice president of i play., Inc., an Asheville company that manufactures and sells baby products. “It can’t be minus tourism in Asheville.”
The other side of the story
But others reacted with worry to the statistics presented by Sacks.
Authority officials paid Sacks about $20,000 for that report, said Marla Tambellini, deputy director of the convention and visitors bureau.
The second report produced by Sacks examined the effects of “destination marketing” on a region’s economic development.
A consortium of convention and visitors bureaus across the country, including Asheville’s, paid Sacks roughly $225,000 for the second assessment, Tambellini said. The Asheville portion amounted to about $25,000, she said.
Sacks’ research showed that county tourism generated $134.2 million in state and local taxes, excluding the $9.4 million in hotel occupancy taxes.
“Tourism helped to offset the average household tax burden by $1,232,” Sacks wrote.
Occupancy taxes exclusively fund authority tourism marketing efforts. None of that money pays for local government services, which irks Asheville’s elected officials.
Vicki Meath feels that way, too. She is executive director of Just Economics, an Asheville-based nonprofit organization that advocates for a living wage and a sustainable economy.
The “authority had the opportunity to be more a more sustainable part of our community when they asked (the state General Assembly) for an increase in the occupancy tax,” she said. “This tax could have and still should use a portion of money to support public infrastructure for workers like affordable housing.”
But tourism also provides indirect benefits for communities, according to the study.
Those are the goods and services needed to support the tourism sector, Sacks said. Examples are food grown by local farmers for restaurants and heating and cooling system maintenance done by area companies for hotels.
Sacks’ results included:
• Buncombe County tourism in 2014 sustained 24,856 jobs with a total income of $714 million.
• The finance, insurance and real estate industries in the county reaped more than $300 million in sales from visitor spending.
• The county’s business-service sector – accounting and law firms, for instance – made more than $100 million in sales due to tourists.
Like any model, the one used by Sacks isn’t perfect, said James Kleckley, the Bureau of Business Research director and a finance research associate professor at East Carolina University in Greenville.
“But it gives good information about what’s happening,” Kleckley said.
And the tool Sacks used, while possessing limitations, “is nationally recognized,” Kleckley said. “It provides a good measure.”
An example
During a Monday interview before his public talk, Sacks pointed to the consequences of the 2010 BP Deepwater Horizon oil spill suffered by businesses along the Gulf of Mexico coastline.
Tourists vanished and “the entire Gulf Coast suffered,” Sacks said. “Customers stopped buying goods and services. BP had to pay reparations to companies in industries as wide-ranging as charter-fishing operations and real estate and accounting firms. All of them were able to show damages.”
Tourism employs behind-the-scenes digital marketing professionals, software engineers, and web based professionals, financial professionals, legal professionals, management professionals, and sales professionals in food service and other support industries, said Steve Morse, Hospitality and Tourism program director at Western Carolina University in Cullowhee.
“I tell people, ‘Saying everyone that works in the tourism sector has a minimum wage and minimum skilled job, is like saying everyone that works in a hospital is an orderly pushing patients in wheelchairs.'”
Ten years ago, tourism officials did not see their mission as economic development, Morse said.
“Then, business location factors began to take ‘quality of life’ into account when choosing places to re-locate and start new businesses,” Morse said. “Now, tourism officials are working side-by side with economic development officials because a great place to visit by tourists is also a great place for a high quality of life for employees.”
Tourism as a creator of economic growth makes sense to Robert Malt, president of Malt Company, an Arden operation that offers services such as mergers-and-acquisitions and business-appraisal assistance.
“A lot of the things that attract tourists — such as the scenery, climate, culture, outdoor activities, and a plethora of good restaurants — also attract businesses for relocation or expansion, and entrepreneurs for new business startups,” Malt said.
If it weren’t for tourism, neither his business nor Asheville would be thriving the way both are these days, said Stephen Frabitore, owner and president of Tupelo Honey Cafe, a restaurant company based in Asheville.
Since buying the original downtown location in 2008, Frabitore has expanded the business to encompass what will be more than a dozen stores in five states, employing an excess of 1,200 people by Jan. 1, he said.
During the last three years, the company generated 32 new executive positions with an average salary of $70,000, Frabitore said.
He attributed his success to the “Asheville Halo.”
“People come from all over, visit Asheville, dine here, then go back and talk about us,” Frabitore said. “Tourism has fueled so much of our energy and brand awareness. People are constantly saying, ‘Oh, you’re that restaurant in Asheville. I love Asheville.'”
Tourism’s impacts on Buncombe County in 2014
•Without tourism, the unemployment rate would’ve been 15.9 percent instead of 4.6 percent.
•Tourism-generated jobs included about 2,000 in business services; more than 1,000 in the finance, insurance and real estate sectors; and about 1,000 in education.
•The $1.7 billion spent by tourists in 2014 was 31 percent more than the $1.3 billion spent in 2009.
•Tourism industry employment grew by 12.6 percent from 2009 to 2014. Overall employment grew by 8.7 percent during that same time period.
•Tourism added about 400 jobs per year from 2009 through 2014, an annual growth rate of 2.4 percent.
Sources: Adam Sacks, president, Tourism Economics, Wayne, Pennsylvania; U.S. Bureau of Labor Statistics
Leave a Reply