Welcome Kids Golf

Gensie Henderson hangs a sign outside the Visitors Center at the Theater Building in Pinehurst. US Kids Golf is underway with World Teen Championship 2019 going on now.

Moore County set a new record for summer visitors last month, according to the data projections from the state’s tourism board.

But it doesn’t take charts and graphs to see there are more people on the golf courses, in restaurants and shops, and traveling the area’s roads. This week the 2019 U.S. Kids World Championship kicked off, bringing thousands of young golfers and their families to Moore County — yet another daily reminder of the impact of tourism on the local economy.

On Tuesday, town leaders and officials from Aberdeen, Pinehurst and Southern Pines met with Triangle J representatives for the bimonthly TriCities Working Group to discuss “big picture” concerns that affect all three communities. 

Typically these conversations have focused this year on recycling issues and long-term planning efforts, particularly along their shared highways and borders. But short-term rentals — a growth industry with the rise of Airbnb-style accommodations — have also been frequent topic.

Additionally, town leaders are starting to look at whether an increased occupancy tax rate could help ease the burden of tourism-generated demands on their town’s services.

Currently the Pinehurst, Southern Pines, Aberdeen Convention and Visitors Bureau (CVB) collects a 3 cent occupancy tax on all overnight stays to hotels, motels and Airbnb rentals. The tax is limited to overnight visitors, with no impact on residents.

In the not-too-distant past, the CVB was unsuccessful in its attempt to lobby county leaders to increase the occupancy rate tax to 6 cents. The plan they laid out would have allocated a portion of the increase to help fund to a new sports complex in Aberdeen, which would have been used for youth sports tourism initiatives. 

More recently, a subcommittee of the CVB board has been looking at a broader approach to tourism product development. But those discussions are conceptual, with nothing specific on the table at this time.

“The CVB is in no position to raise the occupancy tax in Moore County,” said Phil Werz, CVB president and CEO. 

In a brief email sent to The Pilot, he noted the county commissioners believe people are “tax fatigued," despite an understanding that the occupancy tax is restricted to overnight accommodations. Moore County residents are facing increased property tax valuations this year, and several municipalities have also increased their tax rates.

The CVB board has not approved any plans or requests for an increase, and Werz said that he does not want to “speak in hypotheticals.”

But during Tuesday’s discussion, Southern Pines Town Manager Reagan Parsons said Werz had met with area leaders in June and felt it is fairly clear that the CVB intends to move forward “at some point” in seeking an increase on the occupancy tax rate.

Parsons recommended the TriCities Working Group schedule a joint meeting with the CVB board to look for places where they reach consensus on priorities prior to taking any requests before the Moore County Board of Commissioners.

“I think this is going to come back up sometime in the next 18 months, which is not a bad thing,” Parsons said.

The challenge for both groups will likely hinge on how they see any potential new funds allocated.

Parsons said the legislation on occupancy tax is not handled consistently across the state by local CVBs. Some areas permit municipalities to funnel money toward town services that see greater demand as a result of visitors; other areas do not.

Dare County, along North Carolina’s coast, uses a complicated formula for its 6 cent occupancy tax rate. Three percent is allocated to local governments, with one-third to the county for solid waste collection and public safety needs, and two-thirds distributed among the county’s six towns in proportion to the amount of ad valorem taxes. The beach towns’ funds are then restricted to tourism-related purposes, including construction and maintenance of public facilities and buildings, waste collection and public safety. Another 1 percent is used for marketing and administration to promote tourism, and 2 percent is used for beach nourishment projects.

Buncombe County, the greater Asheville area, is another oft-cited example. It was one of the first areas of North Carolina to begin voluntarily charging a room occupancy tax and, in 2015, began dedicating 1 1/2 percent of its funding to a tourism product development fund. To date, the Buncombe County Tourism Development Authority, through the Tourism Product Development Fund (TPDF), has awarded $44 million to 39 community tourism projects since 2001.

Parsons said the only funding models he has seen locally, thus far, push money toward tourism marketing efforts but not necessarily toward helping communities handle the influx of people once they arrive.

“What I know of these programs is they are creating things to attract people to come here, but it doesn’t support them once they are here,” he said.

Aberdeen Town Manager Paul Sabiston said it would be important for tourism development project funds to be fairly distributed across the county.

In particular there was discussion around the new improvements at Hillcrest Park in Carthage, which are viewed favorably, but were paid for using county taxes from all residents, including those who live in the more heavily populated municipal areas.

“I’m not for always sending our parks and recreation money to northern Moore,” Sabiston said. “It is just not fair. We are bigger, and because we have more people we do our own (projects), but we are suffering from that."

Pinehurst Village Council member Kevin Drum suggested each of the towns should do some homework to come up with actual dollar figures they spend to support tourism efforts.

“There are things we do in the municipalities that help put heads in beds, to speak their language,” Drum said. “This can’t be just skimming. It is about what we are actually doing to improve tourism, an authentic real appeal.”

Parsons agreed, noting that while tourism marketing is often focused on first-time visitors, it is up to the towns to create an atmosphere that encourages return visits.

“It is the experience once you are here that determines if you come back,” he said. “What percentage of our annual tourism is a result of that return customer? And what are we are doing to provide that positive experience, whether it is public safety, beautification, mowing along state-owned roads and other things we do?”

Triangle J Executive Director Lee Worsley recommended the TriCities Working Group, and potentially the CVB board, bring in an expert to speak on the topic of how occupancy taxes could be structured and what options are available under state law.

“We need to have a constructive educational conversation of what does it mean for us,” he said.

Southern Pines Town Council member Jim Simeon also asked the Triangle J team to research how different counties and areas in North Carolina handle their occupancy tax rate allocations.

“I’d like to know how they are spending those extra funds,” he said. “How it was used, and how has it increased the number of folks coming to that area.”

However, in a phone interview late this week, Werz was cautious. He said the CVB’s bylaws restrict occupancy tax-related revenue exclusively to tourism marketing and development.

If the rate was to be increased to 6 cents, as previously proposed using the existing 2/3 formula, he anticipated 4 percent would be directed to marketing and 2 percent to product development, similar to the Asheville model, which primarily has been directed to new brick-and-mortar investments.

“We want to enhance what we have,” he said. “If there were to be a grant process, the projects would have to promote tourism.”

Recent statistics indicate North Carolina visitors spent $69 million per day last year, generating $5.6 million in visitor-related taxes. 

Locally, according to June 2019 monthly lodging report filed by Smith Travel Research, room demand in the Sandhills has been up — with the region posting a double-digit gain of 13 percent over last year’s figures.

“We are here to fill hotel rooms,” Werz said. “For example, we don’t just promote golf, we promote golf packages that include an overnight stay. So any product development projects must prove how many room nights they would contribute.”

“There would be vigorous opposition from the CVB board for municipal projects that do not generate room night revenue.”

Contact Laura Douglass at (910) 693-2474 or laura@thepilot.com.

(1) comment

Kent Misegades

If tourists are paying a percentage already, why should the rate be increased? At a fixed rate, doubling the number of tourist dollars doubles the tax revenue from them. Increasing the rate is progressive taxation. Like income tax, progressive taxes punishes higher spending and leads to less overall tax revenue. If you want more of something, lower its cost. If you want more tourism dollars, lower tax rates. Tourists have many, many options to our area, including golf. Increase taxes aimed at them and they will go elsewhere.

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