Dollars continue to surge into Asheville tourism sector

But hotelier predicts lower hotel occupancy and room rates for up to four years as new area hotels open -- particularly beyond downtown

Asheville and Buncombe County's tourism industry continued to thrive during the past fiscal year, which concluded at the end of June.

The area set an occupancy record for lodging properties with an average rate of 73.3 percent, said Stephanie Brown, executive director of the Asheville Convention and Visitors Bureau. That broke the previous year's record of 72.6 percent.

Brown released the data during the monthly board meeting of the Buncombe County Tourism Development Authority on Wednesday morning.

Board members also unanimously approved a board task-force recommendation provided last month that the bureau become an independent nonprofit organization.

The bureau operates as a department of the Asheville Area Chamber of Commerce, which is a 501(c)6 designated nonprofit. Pending approval by the U.S. Internal Revenue Service, the bureau would have the same nonprofit designation.

County and CVB officials expect the process to be completed by June. No one from the public commented on the reorganization at the meeting.

A study conducted by the Asheville-based consulting firm, Magellan Strategy Group, concluded transparency, financial reporting and managing the community's $2 billion visitor economy would improve if the bureau became a separate nonprofit.

Chris Cavanaugh, Magellan's founder and president, presented his findings to the county TDA board last month.

Other lodging milestones reported at Wednesday's meeting included growth in room numbers and revenue. Overnight rooms sold grew by 4.1 percent during fiscal year 2015-16 over the previous year — 1,840 compared with 1,767, respectively, Brown said.

And taxable lodging sales increased by 17.7 percent to $311.5 million compared with $264.7 million the year before, according to bureau statistics.

John McKibbon, a board member and chairman of McKibbon Hospitality, based in Tampa, Florida, and Gainesville, Georgia, inserted a cautionary note, however.

The proliferation of new local hotels, and hundreds of additional rooms, coming online will suppress occupancy and room rates outside downtown, McKibbon said.

'It's going to make the job a little tougher,' he said during the meeting. 'It'll probably take three or four years to work through the supply.'

Bureau officials do not have fiscal year 2015-16 data in many categories, such as daily and overnight visitors, visitor spending and how many dollars tourism generated in state local taxes.

That's because the bureau pays a company to collect those metrics every two years instead off annually, said Marla Tambellini, bureau deputy director.

'The year-over-year changes are not substantial enough to warrant the cost on an annual basis,' Tambellini said.

The bureau held its annual meeting Wednesday afternoon at the Lioncrest building on the Biltmore Estate.

Keynote speaker George Zimmermann, chairman of Longwoods International, a market-research firm in Canada, echoed a common refrain oft-repeated by Brown: Tourism advertising contributes to economic development.

Zimmermann gave a presentation to the TDA board and spoke to the Citizen-Times in an interview after the Wednesday morning meeting.

As vice president of the Michigan Economic Development Corporation, he was responsible for that state's tourism sector for 13 years.

Because of a national advertising campaign, he and his colleagues were able to polish Detroit and Michigan's image, Zimmermann said during his presentation.

So much so that New Yorkers began visiting Michigan and even buying second homes there, he said.

A burnished image makes it more likely for people to want to live in that location and move companies there, Zimmermann said.

But during the interview, he acknowledged that he is not aware off any existing studies that show a causal relationship between tourism advertising and growth in traditional economic development categories, such as jobs, new companies and home purchases.

'No one has quantified that,' Zimmermann said. 'That's the next step. But we'd have to get a client to pay for it. People now want to know that, so eventually someone is likely to do it.'