WestJet End Game

By Paul Gable

Horry County Council will vote on a proposal to pay the county’s approximately $570,000 bill to WestJet Tuesday night bringing an end to the WestJet guaranteed revenue saga.

The proposal, which gained approval of the Administration Committee, last week will have the county’s current set aside portion of accommodations tax money, $250,000, paid to WestJet immediately.

The Myrtle Beach Area Chamber of Commerce will pay the other $320,000 and recoup that money over the next few years from annual accommodations tax set aside funds the county receives.

For those of you not familiar with accommodations tax distributions, the state takes approximately 20% of revenue off the top. Of the remaining 80%, 35% must be spent on tourism advertising while the remaining 65% must be spent in tourism cost related expenses.

Of the 35% spent on advertising, the Chamber directs how 30% is spent with it also spending the remaining 5% at the direction of the county. The 5% is called set aside money.

I’m tired of the spin that the county has tried to put on the WestJet deal citing 3,200 passengers flown to Myrtle Beach of which 2,000 are first time visitors.

Think about it – it cost the county at least $570,000 to get these 3,200 new visitors and the Chamber admits to spending another approximately $200,000 on advertising for the WestJet flights.

That’s at least $770,000 of tax dollars spent to draw 3,200 visitors or approximately $240 per visitor. That certainly doesn’t seem cost effective to me.

This was a deal that the county adopted in February 2013 on the assurance that there was ‘virtually no chance’ it would cost the county any money.

When the true cost became known, it was the straw that broke the camel’s back for former Airport Director Mike LaPier. However, there were others on county staff who also should have vetted the deal.

And why was county council under the impression it was guaranteeing 65% occupancy of WestJet flights, the break-even point originally established when, in fact, it was guaranteeing WestJet a 15% profit on its operations?

WestJet apparently reduced the cost of flights somewhere along the way with the county picking up the tab.

This was obviously a bad deal from the beginning although it took the county getting “stung” for council to realize it.

The only question which remains is will WestJet receive a check for one lump sum from the Chamber or will it receive consecutively numbered $1,000 cashier’s checks?