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Tuesday, 27 July 2010 20:32

Facing cuts of its own, regional economic arm axes tourism from its portfolio

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With ever shrinking pockets, the regional economic development arm AdvantageWest is scaling back its investment in tourism for the time being.

The group — which represents 23 Western North Carolina counties — says it will primarily focus on agribusiness, entrepreneurship, green technology and high-paying, advanced manufacturing.

“The board looked at where resources needed to go in this time of limited allocation,” said Scott Hamilton, president and CEO of AdvantageWest.

While AdvantageWest is best known for its role recruiting and luring traditional industry, it also dapples in newer economic development models, from coaching entrepreneurs to funding niche initiatives like Blue Ridge Food Ventures, a commercial kitchen where farmers can turn their produce into value-added products.

With so many organizations already focused on tourism — including chambers of commerce and tourism development authorities in nearly every county, along with the regional Blue Ridge National Heritage Area and Smoky Mountain Host — AdvantageWest decided to focus on less represented fields.

“There is not another regional advanced manufacturing organization,” said Hamilton. “There is a regional tourism organization that does marketing.”

The argument that other tourism agencies can pick up the slack isn’t convincing David Huskins, director of Smoky Mountain Host, a travel promotion agency for the seven counties west of Asheville that has lost its AdvantageWest funding.

Huskins points out that there are also many economic development organizations in each county. They often call on their counterparts at tourism entities to tout the quality of life in the mountains in order to lure businesses to relocate.

“What if the tourism agencies just said to AdvantageWest, ‘Well, there’s so many of your kind out there, we’ll just focus on attracting tourists and let y’all worry about presenting the region’s livability?’” said Huskins.

Hamilton said the funding cut doesn’t mean that AdvantageWest is blind to tourism’s importance in Western North Carolina.

“We see that tourism is a vital component of the regional economy,” said Hamilton. “I had my start in the tourism business when I was eight years old. I know what that means.”

Hamilton pointed out that funding had likewise been cut to traditional economic development commissions like CarolinaWest and the N.C. Industrial Crescent.

“Tourism wasn’t the only one that felt that,” said Hamilton. “Everybody has felt the pain. As the state climbs out of the recession, there will be other opportunities to get back into it and support it.”

According to Hamilton, AdvantageWest will continue funding tourism projects with a significant regional impact on a case-by-case basis.

“They just have to ask,” said Hamilton.

 

A dwindling impact

 

Smoky Mountain Host already stopped receiving its annual $25,000 grant from AdvantageWest in 2009. Likewise, Blue Ridge Mountain Host and N.C. High Country Host have also lost their $25,000 grants.

These grants had comprised the majority of AdvantageWest’s regular contributions to the tourism industry.

Smoky Mountain Host used AdvantageWest money to support cooperative regional advertising in major publications like the N.C. Travel Guide, Frommer’s Budget Travel, and Southern Living. Purchasing one or two pages to create a visible splash in such magazines can cost up to $80,000 per page.

“A $15,000 contribution makes a big difference,” said Huskins.

Working with partners to create co-op advertisements also promoted collaboration in the tourism industry, Huskins said.

Years ago, Smoky Mountain Host had used AdvantageWest grants to support an annual conference of the Southeastern Outdoor Press Association and set up a tourism call center to field inquiries from prospective travelers.

Occasionallly, AdvantageWest took on special tourism initiatives in addition to the annual grants to the Host organizations.

For example, AdvantageWest had supported the Blue Ridge National Heritage Area in its infancy until it could stand on its own legs. It also took part in the MountainSouth USA initiative, a multi-state organization that promoted international travel to the mountains. AdvantageWest had secured funding from the U.S. Department of Commerce for the project.

“I know of no equivalent investments by AdvantageWest in the Western North Carolina tourism industry since that time,” said Huskins.

Hamilton emphasized that the recession has prompted AdvantageWest, along with other organizations, to make tough decisions about cuts. AdvantageWest stopped funding economic development groups years before it cut off funding to the Host organizations.

“Nobody likes where we are with the economic conditions,” said Hamilton. “These are just some of the hard realities of when funding is reduced.”

Smoky Mountain Host will continue receiving funding from tourism-related grants and member dues, but the loss of AdvantageWest’s support will take away from its tourism research initiative.

Research is “vital” to creating a marketing and branding strategy for Western North Carolina, Huskins said.

Up until a few years ago, AdvantageWest had been a major facilitator for Western North Carolina’s tourism industry, but not anymore.

“Frankly, it is clear that the AdvantageWest agenda for economic development in WNC has little, if any, focus on the tourism industry,” said Huskins.

Hamilton said at this point, he could not say whether the Host organizations would receive grant funding once more.

“I don’t know what’s coming down the line,” said Hamilton.

 

Plunging revenues

 

AdvantageWest, which promotes economic development in the 23 westernmost counties, has seen its state contributions shrink by more than 33 percent since 2006.

• State revenues in 2006-07: $1,674,910

• State revenues in 2009-10: $1,089,843

 

Tourism’s impact on the economy

 

According to the latest figures from the N.C. Department of Commerce, travel and tourism in the 23 western counties is responsible annually for 27,100 jobs; $509 million in payroll; $2.4 billion in expenditures within the region; $99.7 million in local tax receipts and $119.3 million in state taxes generated within the region.

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