Is Tourism Back?

By. Neil Williamson, President

Like the Olympic sprinter with a great kick, local tourism raced to the FY21 finish line, fast.

 Albemarle County and Charlottesville tourism tax collections showed great signs of recovery in the first half of 2021, ending the fiscal year even with FY20 and  just $2 million behind FY19.   With the Delta variant on the rise, it is unclear if this news, while positive, can yet be called a trend.

image.pngData compiled by the Free Enterprise Forum found the two localities had record setting tourism tax collections in April, May and June of 2021.  It is important to note these collections represent activity in the previous month and as such are defined as “a lagging indicator”.

March 2020 we first saw the decreases of tourism taxes due to the COVD-19 Pandemic, these numbers actually started to improve in the mid Summer of 2020 but did not reach “normalcy” until February 2021.  The combined tourism taxes for May of 2021 spiked 174% above the COVID-19 impacted 2020 results.  By comparison the May 2021 results were $444,321 (15.65%) greater than the May 2019 results.

Tourism tax collections for both FY20 and FY21 were significantly less than FY19, but the timing of the pandemic spread the $4 million dollar revenue shortfall across two years.

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Digging deeper into the data, neither Charlottesville nor Albemarle have returned to normal levels of hotel taxes (which includes all overnight accommodations).  We theorize this likely reflects the public’s continued COVID fueled reluctance to stay away from home and perhaps reduced number of family members traveling to University of Virginia athletic events and final exercises.   

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The aversion to travel may, in part, have fueled the increase in meal tax revenues.  Albemarle County returned close to its historical normalcy with their June 2021 meals tax collection ($758,488).  Charlottesville meals tax revenue reached a historic high exceeding $2 million in June 2021.   When combined Charlottesville and Albemarle’s meals tax revenue was $2 million behind FY19 benchmark year.  image.pngimage.png

Beyond the raw data, there is an understanding that reduced tax collections will impact the calculation that funds the Charlottesville-Albemarle Convention and Visitors’ Bureau (CACVB).  Absent separate action by the City Council and/or the Board of Supervisors the lost revenue will negatively impact the size and scope of operations as well as future marketing campaigns.  The Free Enterprise Forum remains concerned (as we expressed in 2018) that the revised structure of the government dominated CACVB Board of Directors.  With all due respect, well meaning local government officials know as much about tourism promotion as a hog knows about Sundays.  Considering the challenging times ahead, this might be an opportune time for an CACVB Board governance check.

While we strive to see the tourism glass as half full, we believe much work remains ahead.  Beyond the COVID-19 Delta Variant, we are not convinced tourism drivers such as business travel, parents’ weekend, UVA athletics and cultural events will return in full force until 2022.  When such things do return, will we be regionally positioned to succeed due to marketing efforts throughout the downturn or will the government dominated CACVB not be funded for such activities?

As usual, we have more questions than answers.

Respectfully Submitted,

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

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