Is Myrtle Beach Tourism Tax Working?

Is Myrtle Beach Tourism Tax Working?

By Paul Gable

Local television stations carry daily ads telling us the Myrtle Beach tourism tax is ‘working.’ The ads are run by the Myrtle Beach Area Chamber of Commerce and its associated entities in the hospitality and business community.

Beneficiary of approximately $18 million per year from revenue generated by the tax, the Chamber has good reason to advertise the tourism tax is working. Its marketing arm, the Myrtle Beach Area Convention and Visitors Bureau receives the proceeds from the tax to spend in ‘out-of-area’ advertising to promote tourism to the Grand Strand.

But, going beyond the advertising message (dare we call it propaganda?) one has to ask how is the tax working.

Hotel occupancy and per room revenue rates are basically stagnant throughout the area as are golf course rounds and revenue.

Just last week, we heard the Myrtle Beach International Airport is not only down by approximately 13 percent in passengers this year, but it also is losing that amount of passenger capacity due to cuts in flights by the airport’s three largest serving airlines.

“We’re not as favorable a market to the airlines as we once were,” airport director Mike La Pier told the Horry County Airport Advisory Committee last week.

That is an interesting statement. The airport is in the midst of a $130 million passenger terminal expansion project that will raise airport capacity from the current six to 14 passenger gates. Chamber members were strong in their support of this project as a ‘needed’ expansion because of all the new markets it was going to open up.

The Chamber has partnered with airlines in marketing and advertising promotions in both traditional and, hoped for, new markets. The airport department has waived airport fees to airlines establishing new routes into the area. Yet, passenger traffic is down and the airlines regard the area as less of a market than they professed to when the expansion was started.

Costs are up, traffic and revenue are down – not a strategy for success.

The Chamber’s more general advertising is heavy in the Northeast and Midwest. However, I have seen these ads while traveling. They are bunched with ads for the Gulf Coast (Florida to Louisiana) and the Norfolk/Williamsburg, Va. Area. Often, ads for each of these destinations run consecutively during commercial breaks. It is, frankly, difficult to differentiate one destination from the other.

But is increased marketing the real reason for the tax?

Virtually since the tax was passed by the Myrtle Beach City Council, the Chamber has been linked to local organizations seeking to influence elections. The Grand Strand Economic Improvement Alliance funded ads for re-election of Myrtle Beach city council members who voted for the tax.

According to a recent article by Myrtle Beach Sun News investigative reporter David Wren, “Three political action committees list the chamber’s main telephone number as their business number on documents filed with the Internal Revenue Service. Those PACs also list the chamber’s telephone number as the contact for any questions about their financial records.

According to the Wren article, the Myrtle Beach Legislative Committee, the group that funded the Grand Strand Economic Improvement Alliance, listed the chamber’s telephone number as its point of contact and the chamber’s address, 1200 N. Oak St., Myrtle Beach, SC, as its headquarters on tax returns.

When the tourism tax was passed, many of the largest hotel golf course groups reduced their corporate marketing budgets by as much as 90 percent. Principals in these groups are past or present Chamber board members and are associated with the local PACs, according to sources with knowledge of the groups.

A tourism tax is passed with the proceeds going to the Chamber for tourism promotion advertising. This tax revenue allows private marketing budgets to be slashed. New political action committees spring up with the chamber’s telephone number serving as their contact number and chamber board members as principals and donors. It’s not hard to see how the reduced marketing budgets freed up corporate money that could fund the political operations of these PACs.

According to chamber records provided to Myrtle Beach city council, Starboard Communications received advertising money from the chamber to place ads in the Washington, D.C. area. Starboard Communications is the political consulting firm being used for Tom Rice’s congressional campaign. It’s hard to believe this is merely coincidental.

While none of this may be illegal, (we still have to wait for the results of the FBI and IRS investigations into the Coastal Kickback scheme to be sure) it certainly is not the best use of local laws and public tax dollars.

While increased tourist traffic and business revenue does not appear to be resulting from the chamber’s public tax funded marketing budget, the resulting reduction of corporate marketing budgets and new uses found for that money appear to be paying off handsomely in political influence for the Myrtle Beach Mafia.

Oh yes, It’s working!