Asheville’s hotel business is booming. Since the city lifted a moratorium on hotel construction in February 2021, nearly 1,700 new hotel rooms are under construction or in the development pipeline, according to city records.
That’s an increase of 18 percent in just under three years over the city’s current room count of about 9,200.
It’s big growth. Yet despite concerns in the community about too much tourism, Asheville’s hotel growth is right in line with the U.S. market overall. The hotel business, which cratered during the COVID-19 pandemic, has rebounded strongly. With strong employment and the prospect of lower interest rates in the coming year, hotel investors are jumping back in.
“The hotel industry has completely recovered from the pandemic,” said Diego Bufquin, a professor at the Rosen College of Hospitality Management at the University of Central Florida. Bufquin said the 25 largest hotel markets in the United States are all experiencing strong growth, and Asheville’s hotel boom is likely to continue.
“Overall, it’s a good situation, not only for Asheville but for the hotel industry as a whole,” he said. “You’re probably going to see more hotel transactions and new construction announced in Asheville.”
The city imposed the 17-month moratorium in September 2019 amid concerns about lightly regulated growth. During the moratorium, the city revised its zoning code, creating “overlay” districts that directed new hotel development to areas on the northern outskirts of downtown, as well as to the River Arts District, Biltmore Village, and Tunnel Road areas.
The city also developed a point system creating incentives for developers to add green features, create community spaces, and contribute money to the city’s funds for low-income housing and racial reparations.
Critics say the point system doesn’t do nearly enough to return benefits to a community that pulls in nearly $3 billion a year in visitor spending. For example, the Moxy Hotel, under construction on Biltmore Avenue, will pay about $529,000 in fees for housing, neighborhood improvement, and public art, according to city records.
“They’ll make that back in a quarter,” said Gordon Smith, a former City Council member who served as the council’s representative to the Buncombe County Tourism Development Authority.
“I have always been very welcoming to visitors. And we appreciate them leaving their dollars,” he said. “Then you start doing the math. And you realize that the amount of money the hotel corporations are extracting from Asheville far outweighs the benefits they’re bringing.”
McKibbon Hospitality, the Florida-based developer of the Moxy, did not return calls seeking comment.
City Council Member Kim Roney was the lone vote against the new zoning code. She said the city should have held out for at least double the contributions directed to affordable housing.
“We’re getting, in my opinion, too many hotels,” Roney said. “The system was set up to incentivize hotel construction, not land use.
“For the downtown neighborhoods, hotel use is competing with housing and commerce. What that means is, we have to subsidize affordable housing and transportation, because people are having to live farther away.
“As someone who worked in the hotel industry, the number of times I had to take my staff home after the bus ended – it was a lot,” Roney said.
Representatives of the Asheville Buncombe Hotel Association declined to comment for this story.
Hotel occupancy dips
Although Asheville is still seen as a premier destination, some of its trends were down in the past year. According to the Asheville Convention & Visitors Bureau, hotel occupancy for the fiscal year ended June 30 was 68.8 percent, still healthy by industry standards but down 1.5 percent from the previous year.
Revenue per available room (RevPAR), an important measuring stick, was about $125, down 1.9 percent from the previous year. The average daily rate of $182 was down 0.4 percent.
Christina Roush is an architect who serves as vice chairperson of the city’s Design Review Board. Roush said she’s optimistic that the city can continue to work with developers to create hotel projects that meet the needs of both parties. The amount of construction, she said, is “reflective of the demand.”
“The members of the committee have done a great job communicating with the developers on what we want to see,” Roush said. “There are goals to have more public benefit, be more sustainable, have more green infrastructure.
“Generally speaking, activating the city is the most positive outcome,” she said, referring to the idea of bringing more people and activity into the city. “There’s a push from the community to keep a lot of things as they are. But from my perspective, there’s a lot of vacant parking lots, a lot of vacant buildings, streets that are not being used.”
New hotels, she said, will “activate our space, create a lot of jobs. Any time you can have a building, or a renovated building, instead of a parking lot,” it’s a win.
“I don’t think just stopping development is the answer,” Roush said. “I think collaboration is the key.”
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Reinan was a reporter for seven newspapers from Alaska to Florida. He was part of a team awarded the Pulitzer Prize for breaking news coverage at the Minneapolis Star Tribune. Email jreinan@avlwatchdog.org.
1700 new rooms – hopefully rooms for low income seniors ( ie: Battery Park) and for unhoused as failure of profitability happens due to over building. Converting parking lots for more hotels? Wow – another reason to stay in the suburbs where I can park at a restaurant.
This city is totally being played. I voted against the affordable housing grift simply because it subsidizes the tourism industry that is largely responsible for the lack of affordable housing.
Hotels downtown are great as long as they are high quality buildings that look good, have ground floor retail and are LEED certified. We need to ensure that all new buildings are energy efficient and produce as must of their own electricity as possible.
Good for the hotels. Bad for low wage workers and generally everyone who LIVES here.
Roush has it right. Roney needs to do her homework. Hotels are highest the property tax payers — meaning they are the top contributors to city coffers — not to mention the sales taxes they generate and the dollars the city is now extracting from them.
Even for this longtime, left of center reader, this article calls into question the much touted journalistic integrity of the Watchdog. Seeking unchallenged input from these 2 on the topic of tourism is revealing as it is disappointing. A different journalist may have challenged the former councilman’s assertion that $500,000 was not enough ‘public benefit’ to extract from a single business? So…how much is enough? A different journalist may have at least tallied what I assume to be tens of millions in annual sales tax receipts, ABC receipts, property tax receipts, greenway investments, ballfield investments, public art and cultural investments. A different journalist may actually attempt to quantify the costs and the benefits of the tourism economy. A different journalist may observe that the same city council members that fought, delayed or ignored investment in housing, roads/I-26, parking garages and water infrastructure for the past 30 years, today prefer to blame the TDA for crises of their own making.
Great. Maybe Asheville could find means to foster more high-quality hospital beds also.