Last Call: How Hilton Head Island lost $1 Billion a year

Last Call
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By now, most of our readers have picked up on the feud between Skip Hoagland and the Hilton Head Island–Bluffton Chamber of Commerce. Hoagland has been taking out full-page ads in the local newspaper to draw public attention to what he claims is “Chamber abuse.”

I would pay money to see a presidential-style debate between self-made entrepreneur Skip Hoagland and Chamber President Bill Miles—especially if it would be followed by a boxing match.

 

However, I’m not here to judge. Instead, I would like to take the opportunity to put things into a broader context and take the discussion to a bigger stage. This debate is not about nitpicking about inflated salaries or other allegations; the real discussion is about how our community is performing economically, which is of huge importance to all of us. In order to fully explain this perspective, I need to point out that our economic well-being and the quality of life we all enjoy is dependent on what I call renewables. Unlike a city like Columbia that can depend on a stable population, which has the government, the military and the university as the anchor tenants of its economy, Hilton Head Island is dependent on visitors (who are usually staying for a week), second-home owners (who stay for a few months) and retirees (who stay for years). We have a constant need to renew these three population segments in order to keep our economy going.

Here are some highlights that the Mayor’s Vision Task Force has documented in the report submitted to Town Council, which has since been made public:

Hilton Head Island’s visitor trend has been on a steady decline for more than a decade.

Today, 35% fewer people come to visit the island than in its heyday—that’s more than 700,000 fewer visitors per year.

The economic impact of the missing visitors is estimated to represent $1 billion in annual spending in our local economy.

As a result of this decline, Hilton Head Island has lost valuable spring and fall tourism business.

Another result of the decline is that businesses have less money for renovating our aging infrastructure and for promoting themselves, making us less appealing and less competitive.

Many establishments have been forced out of business.

Hilton Head Island is, by many, no longer regarded as a first-class destination.

Tourism depends on active marketing campaigns that constantly stimulate the desire to visit a destination and drive potential vacationers to make reservations.

Hilton Head Island has many competing destinations that vie for the same visitors, and often, those competitors have larger marketing budgets.

The days when the original developers had large advertising budgets are over. Then time when Marriott was using its marketing machine to bring potential timeshare buyers to our shores is over. As a result, we depend to a large degree on the effectiveness of the Chamber, which receives more than $2 million in public funds as our designated marketing organization. Therefore, the Chamber has a responsibility to the entire community.

The percent of overall revenue actually being spent on promoting Hilton Head Island is crucial.

According to its audited financial statements, the Chamber generated $4.5 million in revenue, but only spent $1.5 million to promote Hilton Head Island, meaning that the other $3 million was spent on salaries, overhead, studies, etc. This is an unacceptable ratio.

Today’s visitor is tomorrow’s neighbor, and if fewer visitors come to experience our island, this will translate into fewer people buying second homes, starting businesses here or retiring in the Lowcountry—which in turn means less tax revenue for the town and less demand for housing, which then drives real estate prices down and means fewer job opportunities, less money for cultural institutions and less money for not-for-profit organizations. The list goes on.

A general economic decline ultimately affects everybody’s quality of life, because we could not afford beach renourishment projects, parks, bicycle paths, the symphony, the arts center, great golf courses, and the variety of restaurants and retail stores without the influx of visitor spending.

 

Hopefully by now I have made it abundantly clear that it is time for the public to get engaged in this discussion. Town council, ATAX committee members and the Chamber board need to look at the big picture and realize the responsibility they have toward the entire community. While not everybody can agree with the way Skip Hoagland rang the alarm bell, it is time for all of us to wake up and start working on a solution that will reverse the declining tourism trend.

Onward!