Steep drops in visitor spending have created an $86,500 budget shortfall for the Wrightsville Beach Tourism Marketing Committee—the sharpest in New Hanover County—and officials hinted this week that promotional programs may get squeezed when tourism authorities are forced to trim their budget for years hereafter to make up the difference.
Officials with the Wilmington/Cape Fear Coast Convention and Visitors Bureau have stressed they will utilize contingency money to keep programs in place, and any budget tweaking will have little-to-no impact on the committee's capacity to market.
Officials have expressed optimism the economy will rebound soon and visitor spending will increase.
How quickly that turnaround manifests itself and the rate at which visitor spending increases will ascertain how many dollars are trimmed off the committee’s budget, thus determining the shortfall’s affect on promotional programs.
For a town committee responsible for stimulating visitor spending, the shortfall highlights the enormous costs associated with drawing tourists to Wrightsville Beach during a time when people are unwilling or unable to travel.
Room occupancy tax collections from Wrightsville Beach have been down for three out of the last five months. The two months in which collections were above 2008 levels, July and October, gains were less than 28 percent combined.
Collections dropped more than 31 percent over 2008 in November of last year alone, offsetting the minor gains made in July and October. Collections for December have not been announced.
Bureau officials attribute the plunge in collections to a slump in the number of travelers and hotels slashing rates to fill rooms, said Connie Nelson, a bureau spokeswoman.
The budget shortfall is just another link in a chain of demoralizing developments to reveal the state of Wrightsville’s tourism industry.
A routine audit of Wrightsville's finances for the fiscal year that ended on June 30, 2009, showed the marketing committee had maintained between 4 and 5 percent of its promotional fund in reserve, much less than the 25 percent that is required.
During a committee meeting Tuesday, Jan. 12, Kim Hufham, president and CEO of the visitors bureau, made the shortfall public. She said “legislation” requires Wrightsville Beach to keep a quarter of its promotional budget in reserve. However, Avril Pinder, county finance director, indicated that every beach community is expected by county policy, not law, to reserve 25 percent of its revenue to cover emergency costs.
The deficit reflects the cost of marketing expenditures as revenue comes in at lower-than-projected rates, mostly due to cascading room occupancy, officials said.
To restore its reserve fund balance, Wrightsville Beach will need to first increase its reserve to 8 percent with a slight budget amendment, Pinder said, and then it should set aside additional monies each budget year until it restores its reserve to 25 percent.
Pinder will recommend to the New Hanover County Tourism Development Authority, the managing body, that it allow Wrightsville to maintain an 8 percent reserve fund.
If the authority disapproves, which officials suggested is unlikely, the committee “would probably not do anything the rest of the year,” Hufham said during Tuesday’s meeting.
Otherwise, county and town tourism authorities will adjust the current and any subsequent year's budgets until the balance is restored,.
The committee along with the visitors bureau “will be making adjustments to the existing and FY 10-11 budget to cover the shortfall with as little impact to the marketing programs as possible,” Paige Somervell, visitors bureau marketing manager, said in a recent e-mail message.
Wrightsville’s shortfall dwarfs other New Hanover County beach communities. Carolina Beach is only short about $1,300; Kure Beach is down $3,100.
