2009 expected to be tough for Atlanta tourism

Next year is expected to be tough financially for the Atlanta Convention and Visitors Bureau unless the hospitality business turns around.

The group, which is tasked with bringing tourists and trade shows to the city, is forecasting a 2.6 percent decline next year in its main source of revenue — hotel/motel tax collections — and a 3.2 percent decrease in overall income compared with the year before.

The ACVB passed a $16.3 million budget Thursday at its executive board meeting. The budget includes a freeze in salaries and some reductions and adjustments in benefits.

“In general, right now the battle cry is to get through ‘09,” said incoming president William Pate.

The hotel/motel tax projections for 2009 that the bureau receives will be just under $1 million less than the 2008 hotel tax budget, said Gregory Pierce, ACVB executive vice president, chief financial officer and chief administrative officer.

The news comes on the same day that Tivoli Properties formally announced plans to build a 53-story Mandarin Oriental hotel and condominium project in Midtown. The lodger, which will include 198 hotel rooms, is expected to open in 2011.

Metro Atlanta Chamber of Commerce President Sam Williams praised the Mandarin project as a shining example of Atlanta’s continued growth as a business center and destination, despite the economy.

“These kinds of things don’t happen in second or third tier cities,” he said of the project. “These things happen in world capitals.”

Atlanta also is welcoming two large popular exhibits — the High Museum of Art’s “The First Emperor: China’s Terracotta Army” and the Boisfeuillet Jones Atlanta Civic Center’s “Tutankhamun: The Golden King and the Great Pharaohs.”

Atlanta’s $11.4 billion hospitality industry is important to the city. It brings tourists to restaurants, business leaders to hotel rooms and conventioneers to the Georgia World Congress Center, the nation’s fourth-largest meeting facility.

The downturn in the economy, however, has forced many travelers to pull back, especially business travelers. Industry forecasters expect the slump to last into 2009, a much bleaker outlook than they had predicted just a few months ago.

To save money, the bureau took a number of steps to reduce the budget, including instructing department heads to trim 15 percent from their annual program requests. They also reduced operating expenses by $120,000.

“By the end of this year, the remaining gaps in 2009 will be closed,” Pierce said.