Why the Asheville Buncombe Hotel Association wants occupancy tax change

The following is a guest editorial written by the Executive Director of Asheville Buncombe Hotel Association, Jim Muth, and published February 23, 2020 in the Asheville Citizen Times. See endorsement documents from Buncombe County Tourism Development Authority Chair Gary Froeba and Explore Asheville President & CEO Stephanie Brown at the bottom of this page, as well as other information about this proposal.

The members of Asheville Buncombe Hotel Association acknowledge the challenges presented by tourism. With more than 75 percent of the area’s hotels being family-owned businesses, run by people who live here (many for decades and even generations), our members are keenly aware that the community’s needs are changing.

In response, our organization representing all the local hotels has worked tirelessly to develop proposed changes to the law that governs the use of the occupancy tax collected from visitors by our members. We’ve been in discussions with our local delegation to the North Carolina General Assembly to ask for help in making these changes.

Our proposal includes increasing the portion of the tax available for community projects, going from 25 percent to 33 percent. That means $8.3 million each year available for parks, sports facilities, cultural arts, heritage and history projects and city and county infrastructure through the Tourism Product Development Fund, administered by the Buncombe County Tourism Development Authority.

It also includes expanding the flexibility of the Tourism Product Development Fund to go beyond the current limits of only “brick and mortar” capital projects. We propose funding the City’s Transit Master Plan as one of the top priorities.

Our vision through this proposal would also fund the administration, design and maintenance of TPDF-approved projects. For example, a park or sports facility that received TPDF funding would no longer need to rely on taxpayer dollars for maintenance, freeing up those City and County dollars for other purposes.

And our proposed changes would make it possible to use the occupancy tax to pay the debt service on bonds to support major projects.

The proposal also reduces the funding dedicated to marketing Asheville and Buncombe County from 75 percent to 67 percent, and expands the membership on the Buncombe County TDA board to bring in a broader range of tourism partners, including representatives of ticketed attractions, arts organizations, restaurants, and short-term rental owners.

What took so long?

This has been a months-long process. The Asheville Buncombe Hotel Association was formed last summer to address various issues affecting the hotel industry – with an immediate desire to focus on changing the occupancy tax.

In addition to countless meetings with our members and the WNC delegation, we’ve spent considerable time with local elected officials, including Buncombe County Commission Chair Brownie Newman, Asheville Mayor Esther Manheimer, and the two non-voting appointees to the Buncombe County TDA, City Council member Julie Mayfield and County Commissioner Joe Belcher.

Discussions have been collaborative, sometimes with conflicts to work through, but ultimately with compromise.The proposed changes that the ABHA has worked on for months are consistent with recent recommendations by the Urban Land Institute and members of the City’s Multimodal Transportation Commission.

We are proud of the positive impacts that the Tourism Product Development Fund has had on our community and want to see it continue and expand. One TPDF recipient was featured on the front page of the Asheville Citizen Times this past week: the LEAF Global Arts Center, a cornerstone in the continued rebirth of Asheville’s historic African American business district known as The Block. This vibrant organization received a lead gift of $705,000 in TPDF funding, which founder and executive director Jennifer Pickering called “transformational” at the recent ribbon cutting.

The Asheville Buncombe Hotel Association likes the idea of creating more transformational opportunities through these proposed changes to the occupancy tax.

In the end, we all want what is responsive to community needs and still consistent with the purpose of the tax, which has been a successful strategy for Asheville and Buncombe County, attracting customers to local businesses, providing jobs and creating tax revenue.

Jim Muth

Jim Muth is Executive Director of Asheville Buncombe Hotel Association, which he helped form in 2019 after he and his wife sold the local bed and breakfast they owned for 12 years. His volunteer term as a member of the Buncombe County Tourism Development Authority expired last year after six years, including two as chair.

Responses to ABHA’s Proposal

Gary Froeba, Chair of the Buncombe County Tourism Development Authority, and Stephanie Brown, President & CEO of Explore Asheville Convention & Visitors Bureau, have each issued statements regarding the Asheville Buncombe Hotel Association’s proposal.