Government Tourism Coup Will Produce Poor, Politically Palatable, Promotion and Pitiful Profitability

FORUM WATCH EDITORIAL

By. Neil Williamson, President

Local government is poised to cook the golden goose — tourism.

After a series of political moves over several years, local government, not the local tourism industry, is now in charge of marketing our community to the outside world; they honestly don’t know what they don’t know.

And they are about to become more powerful.

Please let me explain.

Imagine if your business was required to calculate, collect and turn over to the government additional taxes purportedly to promote the region and therefore generate more business for you.

That’s how § 58.1-3819. Transient occupancy tax (TOT) works.  This is the taxes paid by those who stay in a particular locality (Hotel, Motel, Campground, AirBnB, etc.) for the privilege of doing so.

So now that the tourist tax dollars have been properly collected and turned over to the government, who should be in charge of making the marketing decisions designed to generate tourism?

The industry or the elected officials?

The state code section seems to have an opinion about that specific issue:

….may levy a transient occupancy tax not to exceed five percent, and any excess over two percent shall be designated and spent solely for tourism and travel, marketing of tourism or initiatives that, as determined after consultation with the local tourism industry organizations, including representatives of lodging properties located in the county, attract travelers to the locality, increase occupancy at lodging properties, and generate tourism revenues in the locality. If any locality has enacted an additional transient occupancy tax pursuant to subsection C of § 58.1-3823, then the governing body of the locality shall be deemed to have complied with the requirement that it consult with local tourism industry organizations, including lodging properties.

The Free Enterprise Forum joined with many in the tourism and hospitality industry raising concerns when the elected officials changed the structure of the Charlottesville Albemarle Convention and Visitors Bureau (CACVB) Board from being industry led (a best management practice across the nation) to being led by elected officials and government employees.  The current Executive Board includes a representative from each elected body, as well as Charlottesville’s city manager, Albemarle’s county executive, an economic development staff member from both the city and the county and a representative from the University of Virginia and two industry representatives, one each appointed by the city and the county. This means currently two-thirds (66.6%) of the current board is elected or works for the locality.

The localities want this to change, they want MORE POWER.  Next week (12/12) Albemarle County will accept public comment on the proposed changes to the CACVB.

From their proposed proclamation:

WHEREAS, the County and the City desire to amend the Agreement to authorize two members of the Board of Supervisors and two members of the City Council to serve on the CACVB’s Executive Board and to making any corresponding changes to the Agreement as provided in the amended agreement attached hereto as Attachment A (the “First Amended Agreement”).

Regardless of the individuals in the positions, this means that marketing and advertising decisions will be made by a a board where 73% of the members are not directly involved in tourism (either elected officials or work for the locality).  Does this sound like the kind of consultation contemplated under State Code?

The challenge of getting officials to understand marketing outside of their world was made exceedingly clear in the October CACVB advertising pitch.  Allison Wrabel of the Daily Progress has the story

CACVB Interim Executive Director Adam Healey said that the campaign is aimed at 25 to 44 year olds in the Washington, D.C. area and Raleigh, Durham and Chapel Hill in North Carolina, who are looking for short or overnight trips.

“You are not always your customer when you’re doing marketing,” he said…..

…Board member Roger Johnson, Albemarle County economic development director, said he thought the same general concept, but with a regional brand that “wasn’t so Charlottesville centered” would be “better accepted by the folks in Albemarle County who are taxpayers” and the target group….

…Albemarle supervisors Diantha McKeel and Ann Mallek said they hardly saw the county mentioned….“It will be a surprise to no one that it took me seven years to get Albemarle on the logo and I’m not going to give it up,” Mallek said….

Many of the industry representatives on the board supported using “C’ville” in some fashion and said they thought the proposed campaign was a great start.

“In my mind, the C’ville six letters identifies the region,” said George Hodson with Veritas Vineyard & Winery, the county tourism industry representative on the board. “I think we can’t lose sight of the forest through the trees and kind of lead with our own baggage. C’ville identifies this region without saying Charlottesville.”

“Why try to gum up peoples’ mouths with phrases and long things that aren’t going to be marketable?”

The proposal is the groundwork of a good campaign, he said.

With the latest government expansion it is being made abundantly clear that the government, not the practitioners will control the marketing message.  It’s difficult for many to understand, the message that resonates to you (and your voters) may not be the message needed to attract young visitors with disposable income and free time.  If such decisions are left to municipal officials, it may be a very expensive lesson.

We believe this structural error goes against best management principles and is in conflict with the intent of the state code.  We believe the imbalance should be reversed, those who collect tourist tax dollars [and have a vested interest in their success] should have the ability to impact where and how the promotional dollars are spent.

In addition, many of the officials on the CACVB board wants to change the performance metrics away from hotel occupancy rates “Heads in Beds” to something else.  If the funding comes from those “Heads in Beds” shouldn’t that be the promotional focus and evaluation tool?

I really hope we are wrong about the officials’ CACVB marketing blind spots and the localities don’t waste millions of visitor (not residents) tax dollars in poor promotion.

If we are right, unfortunately, it will be the tourism industry that will first feel the pain of a poor, politically palatable, promotion producing pitiful profitability.

Respectfully Submitted,

 

Neil Williamson, President

—————————-

Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Photo Credit: http://angielskidlakazdego.blox.pl/resource/goldenegg.jpg

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