Not surprisingly, local hotel occupancy took a beating in March amid the global coronavirus pandemic — it dropped from 90% to just 15% in three weeks.

That creates a stark financial landscape not only for hoteliers but also the the Buncombe County Tourism Development Authority, the organization that uses hotel room taxes to promote the region to visitors and fund local projects that can help bring in more people.

"We are estimating no additional revenue through the end of this fiscal year, which ends June 30," said Stephanie Brown, president & CEO of Explore Asheville Convention & Visitors Bureau. Explore Asheville executes the marketing and sales programs under the TDA's direction.

The TDA held a virtual meeting of its board April 2 because of the COVID-19 outbreak and requirements for social distancing.

Brown said the TDA expects to receive $1.4 million in hotel tax revenues collected by Buncombe County in February. But after that, revenue essentially stops.

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Should the TDA give its funds to unemployed locals?

The dire financial picture came into play later in the meeting when Board Member Andrew Celwyn suggested the TDA step up more substantially to help unemployed tourism workers, artists and others hit hard by the required closures. The TDA previously approved a $50,000 donation to the One Buncombe Fund to help businesses and laid off workers, a move Celwyn previously characterized as "nice gesture."

That money came from advertising money raised by the TDA, not the hotel room tax.

In a message to board members, Celwyn, who operates the Maia Toll's Herbiary shop, said the TDA should put "several million more" into similar assistance, including employing local artists. But some board members and county officials questioned the legality of such a move, as the General Assembly mandate that created the authority requires 75% of its revenues go toward tourism promotion and 25% to the Tourism Product Development Fund for tourism-related community grants.

More:$1M advertising boost approved by Tourism Development Authority

On April 2 during the online meeting, Celwyn again pushed for significant funding of local workers, although he acknowledged the board's legal concerns and tweaked his ideas.

"There’s $4.5 million currently available in the TPDF," Celwyn said. "Take $3 million of that and look for ways we can help make the area more attractive for tourists and residents alike."

He suggested the TDA could fund murals, a sculpture garden and a medicinal herbs garden. The authority could also pay local artists, musicians and other unemployed workers to share their stories with the TDA's advertising agency, Atlanta-based 360i.

"Nothing is going to be more authentic than hearing from the people of Asheville," Celwyn said.

Can't 'jump off the cliff'

Asheville City Councilwoman Julie Mayfield, a non-voting member of the TDA Board, acknowledged ongoing community discussions about possibly using TDA monies to help displaced workers. She supports finding legal ways to do that, but Mayfield said she also has to adhere to her oath to the state Constitution and cannot approve of misallocating funds.

"I can't support proposals to jump off the cliff and use the money any way we might want to," she said.

Board member and hotelier John McKibbon said recent weeks have been "a very desperate time, as his company "laid off so many of our people." But, he added, unemployment programs and the federal government stimulus plan mean, "For the next little bit, everyone should be OK."

More:Tourism Development Authority shows support for hotel tax change, authorizes budget increase

Board Chairman Gary Froeba said everyone on the board wants to help displaced tourism workers, and he liked Celwyn's idea of using local talent for tourism promotion. The managing director at the Omni Grove Park Inn, Froeba said he never envisioned having to furlough 1,000 hotel workers.

"But I did," he said. "It was a painful experience."

He also said Jim Muth, executive director of the Asheville Buncombe Hotel Association, told him this week that organization is working on a plan to help locals, with details coming next week. While many hotels in the area have brand names, Froeba noted that 78% of them are locally owned.

Double standard?

Celwyn pushed back, noting that earlier in the meeting the board had approved releasing $500,000 in funding to the Asheville Art Museum, even though that money was supposed to be contingent on the museum getting an official "certificate of occupancy" from the city. While the museum opened in November, the CO is hung up in a dispute over a breezeway at the renovated Pack Place structure.

The board also approved an amendment to an $800,000 funding grant for renovations to the YMI Cultural Center downtown, a grant originally issued in 2018. The changes affect the scope and timing of funds disbursed for the project. Typically the TDA requires a matching grant.

"It seems like we're willing to bend the rules when we want to, and we’re not willing to bend the rules when we don’t want to," Celwyn said.

Board Member James Poole took exception, saying, "Those are things within our legal ability, those kinds of tweaks."

He and other board members said the best solution is to continue with a plan to ask the General Assembly to tweak the TDA's funding formula and possibly allow some funding for emergency relief programs.

TDA has $13.3M fund balance

Brown said the "duration of this crisis remains unclear and will for some time."

The TDA has a total operating fund balance of $13.3 million, including a $1.5 million state-required contingency fund, an undesignated fund of $6.6 million and a designated contingency fund of $4.9 million, according to its February financial report.

The undesignated fund is similar to a checking account, with the balance ebbing and flowing as revenues come in and expenses are paid, Brown said. The designated fund is like a savings account.

Brown said the TDA has canceled advertising campaigns this spring totaling $6.7 million, and it has reserved $3 million "to restart advertising” once the coronavirus crisis is over.

Total expenses for this fiscal year, from July 2019-February 2020, have been $8.7 million.

While the $4.9 million in the designated fund sounds like a lot, Brown noted, "That's three months of operating revenue."

Marla Tambellini, vice president of marketing at Explore Asheville, said a survey the TDA commissioned suggests visitation will pack back up strongly in August. But the TDA is still forecasting several curtailed revenues into the fall.

In early March, occupancy "was almost 90%," a strong figure for that time of year.

"Last week, occupancy stood at just 15%, with most of that outside the city core," Tambellini said, adding that it was an unprecedented drop.

The average daily hotel room rate has dropped from just over $160 a night to about $80. The people staying in hotels are either essential workers or travelers who were unable to return home quickly.

Earlier in the meeting, the TDA also voted unanimously to waive the penalties for hotels paying the room tax late for the months of February and March.

Note: This story has been updated to correct information about an $800,000 grant to the YMI Cultural Center. The TDA board on April 2 unanimously approved changes that affect the scope and timing of funds disbursed for the project but did not provide any additional funding.