By. Neil Williamson, President
Considering COVID-19 “Stay at Home” orders, it is not surprising tourists are not coming to Charlottesville or Albemarle County. According to tax data obtained by the Free Enterprise Forum, tourism activity is down by over 58% for March and April.
By combining “Meals Tax” revenue and the Transient Occupancy Tax collections of both localities, the chart reflects monthly “tourist” activity compared to the previous two years. It is important to note “tourist” tax collection runs one month behind actual activity (i.e. taxes reflecting April activity are collected in May).
Looking specifically at the City of Charlottesville May 2020 Meals Tax collections, shows that roughly half the value of meals were served in 2020 when compared with the previous two years. In May 2020, the city collected nearly 50% less (about $1 million dollars) in Meals tax revenue when compared to 2019 or 2018.
According to Charlottesville’s Commissioner of the Revenue, the City collected about $600,000 less in Transient Occupancy Tax (Hotel Tax) revenue when compared to 2019 or 2018.
While Albemarle County also saw significant percentage reductions in their “Tourism” taxes, the fiscal impact was less severe than Charlottesville’s. Albemarle’s May’s Meals tax collection was down over 62% when compared to previous years, but that amounted to a tax revenue shortfall of $400,000 compared with a shortfall of $1 million in the City.
Albemarle County’s May 2020 Transient Occupancy Tax revenue dropped by more than 80%. This resulted in a tax revenue reduction of $400,000 when compared to May 2019 or May 2018.
Hospitality/Tourism is an industry that has been hard hit by COVID-19 but is getting prepared to rebound. Writing in Sunday’s Daily Progress Chair of the Virginia Tourism Corporation Susan Payne wrote in an opinion piece:
The tourism industry is resilient and will bounce back from this crisis. No other economic sector can match tourism’s ability to quickly re-engage businesses and put employees back to work. But in order to rebound quickly, the tourism industry and travelers alike must take every step necessary to encourage the health and safety of everyone as we all navigate during this time.
The Free Enterprise Forum remains cautiously optimistic that the tourism industries will find a way forward. The slight improvement in tax revenue collections from April to May are too early to see as a trend but they do offer a glimmer of hope.
Neil Williamson, President
Neil Williamson is the President of The Free Enterprise Forum, a privately funded non partisan 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