Monday, December 01, 2008

And What Happens if the Recession Ripples out to Erode Tourism Dollars?

Richard Lawson exposes the public price tag of landing the 2014 NCAA Women's Final Four:  $1.75 million from hotel tax revenues (a percentage of the hotel tax already subsidizes the Music City Bowl and the CMA events), which currently is not guaranteed.  Oh, and Nashville must have a convention center in place for the 2014 sporting event.  And if the stars don't align, will we see some alternative funding scheme along the lines of funding the Titans' stadium by diverting Metro Water System revenues?  Call me a stick-in-the-mud, but is this challenging economic moment really the time for a city of our size to be chasing more sporting events than we currently have or can afford?

UPDATE: The hotel tax funding plan for the Final Four, as reported, also seems to ignore contingencies like one last year in which Metro covered $4.8 million of the $5.6 million in Nashville Predators' operating loss out of the hotel taxes on tourists. The fact that Metro had to dip into hotel tax revenues (a move opposed by convention center proponents) suggests to me that major sports events do not amount to the goose that lays golden eggs. The projections about increases in local revenues are wishful thinking until they are booked, and there is still profound risk involved that often gets glossed over in the marketing of these events to taxpayers.  It also indicates to me that major sports events, whether they be professional hockey, Titans football, or the Women's Final Four are competitors for an increasingly shrinking part of the tourist tax pie.  Maybe CMA should step up themselves and make some sacrifice of their own part of the hotel taxes for the good of our community.  I doubt they will.

UPDATE: A June audit of collection and distribution of occupancy tax found that, for FY 2008 through March, Metro collected $27,744,320 in hotel occupancy taxes. According to that audit, those revenues go to a new convention center, existing Nashville Convention Center, Gaylord Opryland tourist development zone, Sommet Center subsidy, and tourism and arts promotions. The revenues seem to be earmarked for more than the bowl game and CMA. That audit also found that Metro did not properly allocate hotel tax revenues and did not provide effective internal controls on the allocation process.

It's clear to me why the Sports Council wants to lay claim on the occupancy tax: actual revenues have been increasing since 2004 and running ahead of budget projections since 2005. But is increasing tourism just another economic bubble that is bound to burst eventually? And if it does, where will they turn next for money?

1 comment:

  1. To hear Bristol Tennessee's claims, their recession proof. Why just the other day a local banker boldly stood on tv smiling that no Tennessee banks were affected by the banking crisis. And ya know what- a few days later it was announced Bank of Tennessee is the proud recipent of over 800mil of the bail out- gee, I count a few of them there banks right here in Bristol. Now arent we just all so proud of how this local area obviously thinks that because this is considered a retirement area that everyone that lives here is either too old and feable to recognize recession and all others (excluding the social heirachy)are just hillbilly hicks of no account and wouldnt be able to understand the complexity of thinking about the economy. Infact, One downtown merchant even boasted how her highend store was doing so greatly this season- how people just come from all over to buy her stuff- get real Bristol- none of us are stupid- Bristol is likely being hit harder than Nashville or Memphis because it relies so heavily on the "assets" brought in by retirees, its special interest politics that hurt industry or aspiring business newcomers, as well as tourism with their price gouging during race weekends and lately with any newscast of encumbrant weather the gas prices exceed prices in other major metropolitans- and these self centered people of Bristol- personally offend me with their lies and deceit of just how this economic slow down has not affected Bristol. I believe these people would lie on their mother's death beds if it meant another dollar in their pocket- or if it made them feel superior so they may look down upon all others. Obviously not all the people of Bristol are the offenders- just the chosen few that are well rehearsed in misleading the many for their benefit- Few halos live here- Even NASCAR, Bruton Smith admits they have to tighten up because of the conditions- and doesnt like the price gouging that goes on here, but the city of Bristol continues to let those select people determine its "real" fate - it doesnt take a genuis to figure out that these retirees have lost great sums of their wealth in the stock market and they dont have the estimated time left statistically to recover from it= nothing but social security as a base line, Bristol doesnt have that many middle class (they run off the honest, hardworking social class with their politcal antics)at least not enough to carry the burden of the failing economy. Fortunate for Nashville and Memphis they are consistent in their tourism- and I dont recall any time I was in either city, did I face the price gouging that happens here in Bristol with every event they do- from the races to country music- its one thing to expect a higher price, its another when its of pure Greed and the tourists knows it.