May 22, 2008 - Hotel operators in Forsyth County are growing nervous about the potential effect should the county's hotel-occupancy tax be revoked and the Visit Winston-Salem organization dissolved.

At least four hoteliers said yesterday that they want to meet soon with Ted Kaplan, the Forsyth commissioner driving the push for major changes in how Visit Winston-Salem operates.

Visit Winston-Salem, the marketing arm for the city and county, is overseen by the county Tourism Development Authority. Kaplan was appointed to the authority's board in January.

The agency's primary revenue source is the 6 percent occupancy tax, which is projected to produce about $4.3 million in fiscal year 2008-09, which begins July 1. Kaplan has threatened to lead a vote by commissioners to revoke the tax.

"I'm absolutely concerned because I believe this is the wrong approach for resolving what may be a valid concern on the commissioner's part," said Mike Geissler, the owner of the Sundance Plaza & Hotel Suites. "I want to know the reasoning behind such a drastic wake-up call. Throwing the baby out with the bath water can't be the ultimate goal of Kaplan or the majority of the commissioners."

Kaplan said he considers Visit Winston-Salem to be top heavy on administrative expenses and not producing the best return of investment on the tax revenue. The agency has 15 full-time and 10 part-time employees. Kaplan has proposed cutting jobs to provide more money for direct grants to agencies such as the Arts Council of Winston-Salem and Forsyth County, which he said generate tourism dollars.

Hobie Cawood, the chairman of the authority, said that Visit Winston-Salem's staff has played a crucial role in generating tourism. He cites the average 8 percent increase in occupancy-tax revenue over the past 10 years.

Kaplan has proposed that the authority be limited to spending no more than 10 percent of its occupancy-tax revenue on administrative expenses. If the authority doesn't agree to that spending level, Kaplan said, he has a majority of the commissioners ready to vote to repeal the tax.

Bob McCoy, the administrator of the authority and the president of Visit Winston-Salem, said that despite Kaplan's claims, the authority has never spent more than 10 percent on administrative costs.

Kaplan has also proposed rewriting the local hotel-occupancy- tax act "from the ground up." Any change to the act requires approval of the General Assembly.

Geissler said he drove from Durham to attend Tuesday's authority meeting, in which a $2.7 million budget for Visit Winston-Salem was approved by a 7-1 vote.

"I would like for Visit Winston-Salem to function as effectively as it can," Geissler said. "But I also don't want the uncertainty about the TDA to cause us to lose bookings for events now or 12 to 18 months from now. That's why I want to talk, within a week, with as many local hoteliers and as many commissioners as possible on this issue."

Rachna Atwal, the manager of the Hawthorne Inn & Conference Center, said that some local hoteliers "are in a panic mode" over the potential demise of Visit Winston-Salem.

"Not having their help would handicap our efforts because most of our business comes from relationships proven over time by delivering on our commitments," said Atwal, who also serves on the authority's board.

Atwal said that there could be a short-term boost to local hotels if the occupancy tax is repealed because it would be less expensive to book a room.

"That difference could be a deciding factor in landing some events," she said.

"But if convention and tourism groups become concerned about how well they will be taken care of, we could lose a lot of business down the road," he said.

Pat Bryan, the general manager of the Fairfield Inn & Suites and vice chairwoman of the authority, said she wants the commissioners backing Kaplan to step forward and defend his position.

"I know our owners are prepared to speak out at commissioner meetings whenever Ted's plan is discussed," Bryan said. "I'm sure they aren't the only ones."

Deborah Bumgardner, the general manager of Courtyard by Marriott off University Parkway, said she believes that Kaplan has "an ax to grind with someone," with the hotels getting caught in the middle.

"Ted's accusations are putting into the minds of people outside our area that there's something wrong with the TDA and Visit Winston-Salem," Bumgardner said.

"Visit Winston-Salem is absolutely effective in putting people and groups into area hotels, which is wonderful, since I can't market and run the hotel at the same time."

Richard Craver can be reached at 727-7376 or at [email protected].

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