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CRVA revamping how it tracks visitor spending

New group to gather, vet stats after Observer discovers inflated data

The Charlotte Regional Visitors Authority plans to overhaul how it tracks visitor spending for conventions and other events in response to an Observer investigation about its past practices of inflating claims of economic impact.

The CRVA will move its research department from human resources – where it was seen as a marketing tool – and into accounting. And for the first time, the tourism authority plans to do follow-up work and see how many people actually attended conventions and how many hotel rooms were used.

In the past, the CRVA has inflated attendance by tens of thousands of people, which in turn led to claims of tens millions of dollars of economic impact. Much of that money likely never materialized.

In other instances, the CRVA added millions of dollars of visitor spending for no apparent reason, as was the case with the 2010 National Rifle Association Convention.

For that convention, the CRVA increased its estimate of spending by 600 percent.

The CRVA already has made some changes. Last fall, it began using a new formula for calculating visitor spending. That formula is more conservative and has reduced – sometimes by as much as half – the amount of money visitors are projected to spend.

The CRVA is also seeking a new director of its research department. The previous director, Mike Applegate, left the CRVA in August for a sales position with the Cabarrus Convention and Visitors Bureau.

The Charlotte City Council is ultimately responsible for the Charlotte Convention Center and funds the CRVA.

Mayor Anthony Foxx said he believes new chief executive Tom Murray will make necessary changes. Murray came to the CRVA in December after Foxx and the City Council urged the CRVA board to remove Tim Newman.

“We have pushed for change at the CRVA in a very public way,” Foxx said in a statement. “The new leadership team has had less than a year to get established, and I have confidence that we’ll see good results and better accountability from them. After the Convention, I will ask them to update us on their efforts to date.”

Council member David Howard, however, isn’t too concerned about the economic impact numbers the CRVA has been reporting to the public for years. “You do your best, and occasionally you overdo it, and occasionally you under-do it,” Howard said.

There is no clear opinion as to whether the city should take a different approach in its strategy of trying to bring conventions to Charlotte.

The facts

The Observer detailed how the Convention Center has fallen fall short of its projections for economic impact and booking business.

Estimated to produce 528,800 hotel room nights a year, the center last year was responsible for about 140,000 hotel room nights from conventions and meetings. The city has failed to come close to meeting its goals, even after a number of expansions, including the Westin hotel, a new ballroom and the NASCAR Hall of Fame, which was built in part to lure conventions.

The Charlotte Convention Center is occupied 35 percent of the time. The average for similar-sized convention centers is 57 percent.

Most of the convention center’s funding comes from a 1 percent tax on prepared food and beverages in Mecklenburg County. That tax is mostly paid by Charlotte-area residents.

Murray speaks out

In response to the Observer stories, Murray released a statement that said: “We acknowledge the performance of our business has room to improve, and we are working to make it a reality. As the article points out, every major city invests heavily in this highly competitive business. Like us, those cities clearly view their convention center as a key component to their tourism success and the success of their communities.”

Murray also said that the Observer failed to account for the size of Mecklenburg County’s hospitality industry, which includes more than 43,000 jobs, with a payroll of about $1.3 billion.

Jobs supported by Convention Center events make up about 3 percent of that payroll.

Murray declined this week to comment on how the CRVA might attract more conventions and meetings.

In previous interviews with the Observer, Murray has said a new 1,000-room hotel – which would likely be publicly subsidized if it were built – would bring seven new conventions to the city a year.

The executive committee of the CRVA Board declined to speak to the Observer. Two members of the committee – Larry Huelsman and Chuck Allen – said through a CRVA spokesperson that Murray’s response to the Observer speaks for them.

Board member Geoff Durboraw said he didn’t know the Convention Center was only used 35 percent of the time.

“That got my attention,” Durboraw said. “Anything we can do to measure ourselves with other markets, that’s what businesses do.”

Durboraw said he’s wary of using public money to build a hotel, which was done with the Westin a decade ago. “I’m a believer in trying to keep government and private business separate,” Durboraw said.

The Charlotte Area Hotel Association has said it wouldn’t support a taxpayer subsidized 1,000-room hotel.

“If someone wants to build a 1,000-room with private dollars, we would be for it,” said the association’s executive director, Sid Smith.

Charlotte City Council member Michael Barnes said he supports using hospitality tax dollars to help build a streetcar line through central Charlotte. He said he’s even more inclined to try and use hotel/motel tax dollars or prepared food and beverage tax dollars in light of the CRVA’s struggles to book conventions.

Barnes is against using property tax dollars to build the streetcar, and said using tourism tax dollars could give the city more bang for its buck.

Council member John Autry, who represents east Charlotte and is a firm streetcar supporter, said he would consider using hospitality taxes to build the streetcar. “I think there is room for growth at the convention center,” Autry said. “I would be interested in understanding what the CRVA is doing to help that growth.”

City staff doesn’t appear to be concerned about the convention center’s struggled.

Deputy City Manager Ron Kimble, who oversees economic development efforts, said he believes the CRVA is on the right track with a new formula to calculate visitor spending. He said he believes the Observer underestimated the convention center’s value to the city, and that it accounts for more jobs than the CRVA or the Observer had counted.

Harrison: 704-358-5160
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