Annual hotel sales hit $275M, vacation rentals up 110% despite pandemic: TDA annual report

Pretty much no one in America wants to relive 2020, particularly those in the tourism industry.

Locally, the pandemic caused the loss of thousands of jobs, shut down restaurants and entertainment venues, and temporarily devastated the hotel industry. The Biltmore Estate, the region's largest tourist draw, had its first shutdown since World War II.

But as the pandemic eased, or as American just became numb to its never-ending ebbs and flows, tourism returned, and so did Asheville's tourism economy.

More: Asheville, Buncombe monthly hotel, Airbnb sales expected to top record $65M despite COVID

In fact, the Buncombe County Tourism Development Authority's annual report for the 2020-21 fiscal year ending June 30, which was released this month, depicts a fairly robust industry. Hotel and motel sales hit $275 million, a 5% growth from the previous fiscal year, while vacation rentals soared an astronomical 100%, to $173 million.

The TDA put it this way in its intro to the report: "At publication of this report (Nov. 1), we’re still in the throes of the pandemic but we’re on the road to recovery."

Here are some takeaways from the report, which you can read in its entirety here: https://bit.ly/3c9bYTi.

The job loss was brutal — The area's leisure and hospital industry lost one in four jobs by February 2021, more than half of all jobs lost in all industries across the four-county metropolitan area (Buncombe, Haywood, Madison and Henderson counties).

More: Asheville tourism jobs bouncing back? Yes, but companies still can't get enough workers

It's getting better, but ... — By May of this year, leisure and hospitality employment had improved from a loss of 26% to 15%. "Still, the industry accounted for over one-third of all jobs lost, at 34 percent," the report states. By the end of the fiscal year (June 30), job loss still hovered at 15%. "Staffing continues to be a challenge throughout most industry sectors," the TDA states. Restaurants and other hospitality businesses have struggled to get employees to return to the workforce.

Still, in September, MoneyGeek, a personal finance company, said in its analysis of lost leisure and hospitality jobs in 338 metros in America that Asheville was "one of the most recovered cities in the country." It noted that at the lowest part of the pandemic, Asheville lost 16,700 leisure & hospitality jobs, but 85% of leisure & hospitality jobs have been recovered. That's 14,200 jobs.

Hotel occupancy took a beating in 2020 — In 2019, hotel occupancy stood at 73% in Buncombe County, but it slid to just 50% in 2020.

Rooms sold look impressive, but… Hotels room rentals for the 2020 calendar year look impressive when viewed by itself: 1.49 million rooms sold. But that’s actually down considerably from 2019, when 2.14 million rooms were sold.

Meanwhile, vacation rentals actually ticked up — In 2020, they hit 1.29 million, compared to 1.18 million in 2019. Vacation rentals jumped to 64% occupancy in 2020, up from 59% in 2019.

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Overall, FY 2021 sales were strong in plain old dollar figures — While hotels were the big winner in total dollars, at $275 million, vacation rentals took the prize for astronomical growth, at 110%. Here's a breakdown:

• Hotel/motel sales: $275 million, up 5%.

• Vacation rentals: $173 million. Up 110%.

• Bed & breakfast sales: $13.6M. Up 25%.

• Total revenue: $461.4M. Up 30%

Here's another way to look at how big vacation rentals became: In fiscal year 2021, vacation rental sales accounted for 37.5% of all revenue, up from 15% in fiscal year 2018.

Looking ahead with 'cautious optimism' — The TDA's finance committee, “Taking a position of cautious optimism” for the fiscal year 2022 budget, forecast a 9% increase in revenue compared to Fiscal Year 2019 and set a revenue objective of $27 million.

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They'll spend a lot on advertising — The Explore Asheville Convention & Visitors Bureau, which works under the TDA, has contracted with a new advertising agency, MMGY Global. For fiscal year 2022, “just over half of the operating budget will be directed to paid media partnerships for advertising and messaging,” the TDA states. That’s $10.8 million under the existing allocation, or $10.6 million if the allocation is changed to the new formulation by the General Assembly.

Speaking of the General Assembly ... — The state-mandated formulation for how TDA spends the occupancy tax revenues remains the same — for now: 75% of the tax is used for tourism promotion (marketing and advertising), 25% for projects expected to increase visitation to the community (primarily the Tourism Product Development Fund)

More: Asheville, Buncombe hotel tax legislation: Hoteliers 'advocating at highest levels'

Possible legislative changes to that formula may be forthcoming the TDA noted that “potential legislation supported by local hotel leaders” could shift the occupancy tax allocation to a two-thirds/one-third split, the maximum allowed under state guidelines.

“Should this legislation be introduced and approved by the General Assembly, the Buncombe County TDA and Explore Asheville are ready to implement the change,” the TDA states.

Legislation had not been introduced as of late October, however.

Economic relief went to hundreds of local businesses — Some 400 local businesses received COVID-relief grants from the TDA's $5 million Tourism Jobs Recovery Fund. That was money redirected from the Tourism Product Development Fund, which required a change enacted through the General Assembly.

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Seven weeks after the General Assembly allowed the disbursal of funds, 394 Buncombe County businesses had received grants ranging from $2,000-$50,000. Recipients ranged from restaurants and bars to retail shops and spas. Of the recipients, 97% are still in operation.

This article originally appeared on Asheville Citizen Times: Despite pandemic, hotel sales hit $275M: TDA annual report takeaways