January 22, 2009 Issue
2008 Boone Occupancy Revenues Better Than Most of Industry
Summer Co-op Advertising Rescues Revenues in Economic Downturn
The Boone Convention and Visitors Bureau recently released occupancy tax data for January 2008 to November 2008. The figures tell the story of a year that started slowly, rose slightly in response to collaborative marketing campaigns in the summer, dipped dramatically in September because of the gas crisis and then slowly rose to close to normal—yet still below normal—over the winter holidays. To summarize, 2008 was a roller-coaster ride for Boone’s hoteliers, but the year as a whole was better than most in the tourism accommodation industry. CLICK HERE FOR LARGER VIEW »According to Boone Convention and Visitors Bureau (CVB) Director Mac Forehand, Boone occupancy revenues are “doing better than most of the industry,” based on figures from January 2008 to November 2008. Figures for December 2008 will not be available for another week, said Forehand.
As of November 2008, Boone occupancy revenues were down 1.3 percent from projections, and Forehand expects December 2008 to be flat, making 2008 on the whole just slightly down from the year before—not a bad showing considering the economic downturn.
2008 Boone Occupancy Revenue Discussion
Even in spring 2008, before the gas crisis and economic collapse, the year wasn’t looking good for occupancy revenues in Boone, said Forehand.
“Taking vacations is often the first to go when money is tight, and discretionary spending on vacations went away in the spring,” said Forehand.
With the economy showing signs of weakness, Forehand, Blowing Rock Tourism Development Authority Executive Director Tracy Brown and former Watauga County Tourism Development Authority Executive Director Jared Everett got together in June 2008 to discuss cooperative advertising arrangements in hopes of rescuing the summer tourism season. The three entities front-loaded their budgets to launch a marketing campaign that included joint radio, television, print and web ads.
During July and August 2008, the Boone CVB, the Blowing Rock TDA and the Watauga County TDA placed radio, television and web ads in the Raleigh-Durham market—the area where, according to Forehand, the High Country receives its largest number of visitors. They also selected this market, said Forehand, because it is 185 miles away, or enough of a distance that visitors usually need to stay overnight, thus increasing tourism revenues. In addition to the ads in the Raleigh-Durham area, the three entities also placed print ads in local publications. The print ads, as well as the radio, television and web ads, carried the common theme of “Vacation In Your Own Backyard,” and other similar tag lines.
The collaborative effort worked, said Forehand, as evident in the 1.1 percent increase in Boone occupancy revenues in July 2008 and 0.8 percent increase in Boone occupancy revenues in August 2008, compared to the respective months in 2007. Forehand, Brown and Everett launched the collaborative marketing campaign just as the economic downturn seemed more inevitable and as the gas crisis started to grip the Southeast.
The occupancy revenue figures from September 2008 indicate that the collaborative marketing campaign in July and August 2008 rescued the summer tourism season. As soon as the campaign ended in September 2008, gas shortages hit western North Carolina, media off the mountain jumped on the story and Boone occupancy revenues declined dramatically. Boone occupancy revenues for September 2008 were down 13.8 percent from the year before.
According to Forehand, North Carolina media gave an unneeded amount of attention to the gas shortage in western North Carolina, making a lot of tourists believe that no gas was available in the High Country during September 2008.
October 2008, on the other hand, was up 4.4 percent from the year prior, continuing the month’s streak as the busiest month in the High Country over the last three years. October is leaf season, and in 2008, it was also when gas shortages left the state media’s radar, helping to make occupancy revenues rebound. Historically, said Forehand, October is the High Country’s busiest month, followed by August and June.
Boone occupancy revenues were down 1.3 percent from projections in November 2008, and Forehand expects occupancy revenues were flat in December 2008.
For 2009, the North Carolina Travel Industry Association is predicting that occupancy tax revenues will be down 10 to 20 percent statewide. Forehand believes 2009 for Boone hoteliers will be much better than that “doom and gloom” forecast implies, he said.
“The good thing about the High Country is that we are very close to our core markets—North Carolina, South Carolina, Georgia, Florida. We don’t get [many tourists] from up north, and Virginia has their own Blue Ridge,” said Forehand. “I think we pick up visitors who choose to take shorter trips than longer ones, and that makes up for the people who decide not to travel at all.”
Understanding the Boone CVB and Boone TDA
In 1987, the North Carolina General Assembly enacted legislation that allowed for the creation of tourism development authorities. In 1988, Boone formed a tourism development authority and a convention and visitors bureau. Town officials appointed a tourism development authority board and started collecting a three percent occupancy tax on hotel, motel and bed and breakfast properties within the Town of Boone’s limits.
Unlike most tourism development authorities, the Boone TDA still uses the original guidelines laid out by the North Carolina General Assembly in 1987 for the creation of TDAs. Instead of two-thirds of the budget for promotion and one-third for capital improvements like the majority of TDAs in the region, the Boone TDA spends 60 percent of its revenues on promotion and 40 percent goes into the Town of Boone’s general fund. The Boone TDA is a board of directors that, for the last 21 years, has guided the decisions of the Boone CVB, set policy and reviewed the budget.
“[The Boone TDA Board of Directors’] job is to make sure public funds are being used like they are supposed to be used,” explained Forehand.
The Boone TDA contracts with the Boone Area Chamber of Commerce for promotion, as well as office space for the staff of the Boone CVB. The staff of the Boone CVB is comprised of Forehand, Administrative Assistant Lisa Price and Media & Group Relations Director Michelle Ligon.
Today, the Boone TDA collects a three percent occupancy tax from 18 properties—17 hotels/motels and 1 bed and breakfast, the Lovill House Inn—within the Town of Boone. The Boone CVB is as the action arm of the Boone TDA, as it implements the polices of the Boone TDA.
The staff of the Boone CVB maintain the website VisitBooneNC.com, handle incoming calls from tourists, produce and distribute tourism brochures about the Boone area and create and maintain two other tourism-related websites—www.highcountrybackroads.com and www.chooseandcutfestival.com.
Forehand is also the Watauga County contact for people or business owners wishing to place announcements on the North Carolina Division of Tourism’s website, VisitNC.com.
The Boone CVB is responsible for maintaining contact with community organizations and tourism-related businesses, such as High Country Host, the North Carolina Division of Tourism, the Downtown Boone Development Association, the Avery-Watauga Association of Realtors and the Watauga Nurserymen’s Association. Staff of the Boone CVB handle the layout and production for all printed tourism materials, as well as help with FAM Tours, or familiarization tours that usually consist of travel writers.
The Boone CVB also administers the SETRAC (Special Events and Tourism Related Activities Committee) Grant Program. SETRAC grants are usually from $1,000 to $2,000 and are designed to pay for off-mountain marketing of High Country events. The grants can be used for direct mailings, billboards, print ads or the like, and usually recipients advertise in Charlotte or in the Raleigh-Durham area.
Budget Breakdown
According to Forehand, the estimated budget for the Boone TDA and CVB for the fiscal year 2008-09, from July 2008 to the end of June 2009, is $338,597. That figure is divided into six budget categories:
1. Visitor Promotion—$158,001
This figure includes all advertising, including web, print, radio and television ads, as well as direct mailings.
2. Group Promotion—$8,000
This figure includes web and phone correspondence associated with group sales.
3. SETRAC Grants—$10,000
This figure includes all funds set aside for SETRAC grants during the fiscal year.
4. Capital Equipment—$1,200
The Boone CVB and TDA have a contract with the chamber to provide all office equipment and supplies, minus computers. The Boone CVB must pay for its own computers, and Forehand set aside $1,200 this fiscal year anticipating that one of the computers would break. It has not, as of yet.
5. Contract—$159,396
The majority—roughly 80 percent—of this money is spent on the salaries of the three Boone CVB employees. The balance is consumed by $4,000 for telephone service, $5,760 for annual rent, $7,980 for travel expenses to the Tourism Marketing College, $1,400 for various association dues and $6,480 for office expenses, such as paper, pens, copiers and the like.
6. Professional Services—$2,000
This figure represents the Boone CVB and TDA’s payment for its annual audit.
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