Occupancy tax revenue continues to soar, breaks records in January, February, March

Crowds hit the beach at Fort Macon State Park in Atlantic Beach in this photo from September 2018. The first part of 2021 has been another record-breaking period for Carteret County occupancy tax revenues. (Cheryl Burke photo)

EMERALD ISLE — The boom in tourism and occupancy tax revenue in 2020 continued unabated through the winter quarter of 2021, according to Greg Rudolph, manager of the Carteret County Shore Protection Office.

“January 2021 beat the record set in January 2019 by 79.7%,” Mr. Rudolph said in an email Wednesday. “February 2021 surpassed the previous February high-water mark in 2020 by 45.4%, and March 2021 exceeded the March 2019 best by 97.7%.”

The total collections for those months this year were $299,728, $232,390 and $476,558, respectively.

Collectively, Mr. Rudolph said, “the first quarter of 2021 was up by an astounding 136% compared to the first quarter of last year, and although these winter months are considered ‘low revenue,’ the total quarterly collection was $1,008,677 in 2021 versus $428,219 in 2020.”

That’s an increase of $580,458.

“Granted, March 2020 was much impacted by the COVID-19 pandemic,” Mr. Rudolph added. “Regardless, it is still very apparent we are experiencing a significant uptick in visitation, almost certainly predicated by changing vacationing patterns, remote-working opportunities and the relaxing of social-distancing restrictions associated with the COVID-19 pandemic,” which struck the area in March 2020.

If you go by fiscal year, which runs from July 1 to June 30, the first nine months of 2020-21, July 2020 through March 2021, are up also up by 45.4% compared to the same point in time in fiscal 2019-20, at $7,428,416 compared to $5,114,560.

“In fact our collection through the first nine months in FY 2020-21 is already greater than that of the entire 2019-20 fiscal year, $7,271,245,” Mr. Rudolph said.

Tom Kies, president of the Carteret County Chamber of Commerce, said Friday business owners are “extremely optimistic” about the summer season.

“The one little glitch we have right now is this gas pipeline shutdown,” he said of a cyberattack that took a major distributor offline for several days, leading to panic buying and shortages. “It’s made people a little reluctant to travel. But once that’s over, things are really going to take off. We are the hot spot right now.”

The other problem is a labor shortage, which has forced some businesses to curtail hours.

Mr. Kies said Carteret County – home to an increasing number of retirees – has had a labor shortage for years, but it’s been exacerbated by the coronavirus pandemic. Other related things, such as federal unemployment payments to workers affected by the pandemic, are touted by many as a problem.

“That might be part of the labor shortage. I don’t really know, I’m not an expert,” Mr. Kies said.

The U.S. Chamber of Commerce has urged the federal government to stop the pandemic unemployment benefits program that provides an extra $300 a week to those collecting state unemployment, according to The Associated Press. Some states have announced they are doing just that, but North Carolina Gov. Roy Cooper has not done so.

“What I do know is that here, I’m seeing more and more businesses offering higher pay to try to lure workers,” Mr. Kies said Friday. “I’m seeing $12, $13, $14 (per hour), and the employers are hoping that will generate more interest. Will it work? I don’t know.”

North Carolina’s minimum wage remains $7.25.

Also, the pandemic has affected international workers some companies rely on.

Mr. Kies also noted college and high school students who often fill entry-level and other service jobs are still in school. The chamber is planning a job fair for high school students, and he hopes that will lead to some positions being filled.

The occupancy tax revenue is a sign that as the local economy booms, job positions will continue to be generated, regardless of whether there is anyone to fill them.

Woody Warren, a County Beach Commission member and co-owner of Blue Water Real Estate in Emerald Isle, one of the area’s largest vacation rental firms, agreed the outlook is great for the summer. 

“Advance bookings are up month-over-month from last year," he said, and last year was, unexpectedly, a great one despite the pandemic. 

He also concurred it's difficult to hire employees. The company typically hires many people for seasonal cleaning jobs at rental units. 

“We're OK for now. We'll keep our fingers crossed,” Mr. Warren said.

Not only is the continuation of the high-visitation trend important to local businesses, it’s also important to the county’s beach nourishment fund, which receives 50% of the occupancy tax revenue and helps keep the tourist-magnet beaches healthy.

Mr. Rudolph said the estimated value for the nourishment reserve at the conclusion of March 2021 was approximately $21 million, derived by taking the opening balance July 1, 2020, then adding revenue through March and subtracting expenditures over the same period.

Occupancy tax revenues have broken monthly records every month since July 2020, peaking that month at all-time high for any month, $2.41 million.

The occupancy tax is 6% percent of gross receipts from the rental of any room, lodging or accommodation furnished by a hotel, motel, inn or similar place within the county.

 

Contact Brad Rich at 252-864-1532; email brad@thenewstimes.com; or follow on Twitter @brichccnt.

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