Loudon County Visitor's Bureau may have to close

By Hugh Willett
The Loudon County's Visitors Bureau may have to close and cancel several high-profile events if local governments can't provide additional funding soon.

"We don't have enough money to keep the doors open," said Doug Davis, a Lenoir City Realtor and chairman of the bureau's board of directors.

The budget crisis has raised issues in Loudon County about the bureau's return on investment and whether Lenoir City benefits more than the rest of the county from the bureau's activities.

For 2009-2010, the bureau will get 29 cents from each dollar generated by Loudon County's hotel/motel tax. Last year, the local agency kept 35 cents from each tax dollar. Hotel/motel taxes generated about $353,000 for Loudon County last year.

Based on previous years' revenue, the bureau projects the budget reduction will amount to a loss of $32,000 from the county. If county revenues drop further because of the poor economy, the shortfall could be even greater.

In past years the visitors bureau, established in 1988, has received as much as 50 cents from each dollar of hotel/motel tax, Davis said.

Because the county did not pass its budget on time, the bureau has not received a payment in months, he noted.

"We've been living out of reserves, just trying to keep up the payments on the bureau's headquarters," he said.

If the bureau closes its doors, it loses additional funding from the state, according to Davis. The small headquarters building on Highway 321 will have to be returned to the county if the agency doesn't get the funding it needs for advertising.

"We're not going to keep the place open just as a bathroom stop," Davis said.

Lenoir City, which benefits greatly from hotel/motel taxes because of its large number of hotels and motels and its high hotel/motel tax rate, is the best hope for additional revenue, Davis said.

Lenoir City already has provided the bureau a lump sum payment of $25,000 for the coming year. In 2008, the city collected about $290,000 in hotel/motel taxes, plus a large bonus from sales tax. The recession may be taking its toll, however. In the most recent month, Lenoir City revenue was down 12.5 percent from last year.

The bureau has asked the city to help make up the shortfall with another payment of about $32,000. Lenoir City Mayor Matt Brookshire said the city benefits greatly from the bureau and is likely to increase its investment. The issue will be debated at an upcoming city council meeting.

At stake are a series of high-profile events, including two fishing tournaments in April that could generate sales of at least $350,000, Davis said.

Also in question are a major fishing tournament and a water skiing championship scheduled for 2011, he said.

Davis pointed to the $14 million loss Knox County suffered with the cancellation of the Honda Hoot as an example of what might happen to Loudon County.

A national study calculates a return on investment of $25 for every dollar spent on advertising, Davis said.

In 2008, Loudon County tourist revenue grew more than 10 percent, the highest growth of any county in the state, he said.

The growth was a result of ads in magazines such as Southern Living and on-line promotions as well as signage on Interstates 75 and 40, according to Davis. The bureau also places literature in 13 different state welcome centers.

Loudon County officials acknowledge the need to invest in promotion, but argue that budgets are tight and that Lenoir City benefits more from the bureau's efforts than the overall county.

Loudon County Commissioner Don Miller said he didn't think the loss of $32,000 would be a devastating blow, but Davis argues that the bureau runs on a very lean budget. Miller added that he feels Lenoir City benefits more than Loudon County even though the city provides much less revenue.

Francie Harkenrider, owner of the Watts Bar Belle, a riverboat that conducts special events and tourist rides said the visitors bureau provides a great deal of promotional help to her business.