The economic growth and development of the Asheville area over the past four decades can, in many ways, be attributed to recognition of the potential offered by tourism, recreation and hospitality.
In 1983, the North Carolina General Assembly ratified Occupancy Tax House Bill 426 for Buncombe, New Hanover, Forsyth, Haywood and Mecklenburg counties. The bill created a two-percent room tax in Buncombe County on accommodation rentals with five or more units to be used directly for travel and tourism promotion. The tax was added to the sales tax that properties also charge their customers.
It also established a new public body – the Buncombe County Tourism Development Authority (BCTDA), which brought Buncombe County hoteliers and local industry leaders together to create a comprehensive destination marketing strategy – a strategy that would ultimately expand the customer base for locals businesses, provide jobs, and generate state and local taxes.
In the 1960s and early 1970s, the closing of some of the city’s oldest convention hotels played an important role in the decline of downtown Asheville. In 1973, local leaders were depending on the new Asheville Civic Center complex to fill Asheville area hotels. With the closing of the city’s downtown Landmark Hotel, reversal of the decline became an even greater critical issue.
Pioneers of BCTDA
The mid-1970s brought new Asheville Area Chamber of Commerce Chamber leadership who recognized the potential of travel and tourism to resurrect the declining downtown and showcase the city for other forms of economic development. They also recognized competing destinations in other states were already realizing the results of promotional campaigns executed with revenues derived from hotel-motel taxes.
Buncombe County hoteliers recognized the need to create a self-imposed tax that would ensure the region would not see a drain of its visitors and the economic impact they created each year.
After research and deliberation, the Chamber’s board of directors endorsed the pursuit of a dedicated accommodations tax to fund a full-service destination marketing organization and create a comprehensive strategy to market Asheville and Buncombe County.
The Chamber, working in cooperation with an all Democratic Buncombe County Legislative delegation, and with the blessing of a forward-thinking Asheville City Council and Buncombe County Commission, drafted what would become the first accommodation tax legislation passed in North Carolina. This new source of marketing funds generated the increase in visitation necessary to create and sustain independent shops, restaurants, cultural experiences, events, attractions and accommodations benefitting Asheville area visitors and local residents.
Since then, the legislation has been modified, most recently in July 2022. See below for a timeline.
Key Dates in the Evolution of the Buncombe County Occupancy Tax
- Downtown loses hotels, shopping and businesses.
- 1983: State legislation creates a 2% occupancy tax on accommodation rentals with five or more units (also known as a “room tax”) and creates the Buncombe County TDA.
- 1985: An additional 1% is added and the tourism economic effort begins to grow the community.
- 1997: Uniform guidelines in the use of the occupancy tax are established that apply to all new legislation.
- 2001: An additional 1% is added to create the Tourism Product Development Fund, dedicated to funding new tourism products to create an even stronger economic impact for the community.
- 2015: The occupancy tax is increased from 4% to 6% with 1.5% dedicated to funding the Tourism Product Development Fund (TPDF).
- 2018: Since inception of the Tourism Product Development Fund, the Buncombe County TDA invests $44 million in 39 community capital projects.
- 2020: The COVID-19 global pandemic results in one-time emergency legislation that allows the Buncombe County TDA to create the $5 million Tourism Jobs Recovery Fund grant program using undesignated TPDF collections to help local small business safely reopen and preserve jobs.
- 2021: Asheville is well on its way to recovery as visitors spend $2.6 billion at local businesses, expanding 81% over 2020 and 18% over the benchmark year of 2019. Visitor spending supports 27,000 total jobs for local people. The benefits of visitor spending are distributed across several business categories, with 31% to lodging; 26% to restaurants and breweries; 19% to local shops; 12% to recreation and entertainment; 11% to tour providers and transportation companies.
- 2022: The BCTDA announces the relaunch of a Tourism Product Development Fund grant cycle after a hiatus, brought about in part by the pandemic, with awards to be announced in October.
- 2022: The BCTDA approves a budget for fiscal year 2022-2023 of $40.8 million, based on projected occupancy tax collections.
- 2022: A long-awaited change in occupancy tax legislation, advocated for by local hotel leaders, county and city officials, and our local delegation led by Senator Chuck Edwards, becomes law on July 1. The revised formula shifts occupancy tax allocations from a split of 75% for tourism promotion and 25% for investment in community capital projects, to a split of two-thirds/one-third, making more funding available for more community amenities that are enjoyed by residents as well as visitors.