The Atlanta Convention and Visitors Bureau expects to report nearly a $1 million shortfall in projected hotel-motel tax revenues this year.
The bulk of the decline—about $800,000—has occurred since the Sept. 11 attacks, according to the ACVB.
“The impact has been pretty dramatic across the board in the hospitality industry, and we haven`t escaped that,” said Bill Howard, spokesman of the ACVB. It has a budget of $15 million.
ACVB, which promotes the city`s convention, business meeting and tourism industry, receives about 56 percent of its funding from the hotel-motel tax and 44 percent from private sources such as membership dues and corporate sponsorships.
Board members were informed of the projected shortfall Wednesday during the bureau`s monthly meeting. Although the organization will get less from the hotel and motel tax this year, officials still expect to close 2001 with a $25,000 profit.
“We came into the year in an enviable position to be able to absorb $800,000,” said Chief Financial Officer Gregory Pierce. “We were just set to have a fairly strong year.”
Under state law, hotel and motel guests pay a 14 percent tax within Atlanta and Fulton County.
The decrease isn`t likely to result in cuts among the ACVB`s 75-person staff, although for now a handful of vacant positions will remain unfilled.
“We`re struggling very hard to do all we can to prevent (layoffs),” Howard said.
Hotels and airlines have been among the hardest-hit sectors of the city`s $9 billion hospitality industry. Atlanta, with its 88,000 hotel rooms, is one of the largest hotel markets in the country. Although no major conventions canceled in Atlanta, several reported attendance was off.
This year, Atlanta hotel occupancy is expected to have its biggest drop—8.2 percent—since 1958, according to PKF Consulting. The picture isn`t likely to look much brighter in early 2002, when occupancy is expected drop to 59.7 percent before rebounding.
Hotel managers said they expect revenue to be down between 18 percent and 25 percent this year, according to the ACVB. The ACVB shortfall is based on an expected 30 percent drop.
Bureau officials have already started adjusting. They`ve trimmed back program funding and eliminated some programs that “are not productive in this environment,” said Pierce.
He said the cuts will equal the expected shortfall. For instance, the ACVB has cut overtime and recently canceled its Christmas party for employees and a holiday reception for board members.
Additionally, President Spurgeon Richardson said he recently sent letters to executives at Fortune 500 companies in Atlanta to “Keep Your Meetings and Keep Business at Home.”
Next week, the bureau will host more than 40 local meeting planners to get their feedback on ways to boost attendance and the number of business meetings.
“The events of 9/11 should fully convince people how important the travel and tourism industries are to this market, this country and this economy,” Richardson said.