Visit The Woodlands board members first heard an update on the bureau’s 2020 finances from Monique Sharp, the township’s assistant general manager for finance and administration.
Although Visit The Woodlands annual revenues were nearly 22% under budget through April, expenditures came in 23% below budget. Sharp attributed the net favorable spending of around $18,500 to the bureau’s suspension of some operations this spring.
Due to extended closures at most of the township’s hotels, Sharp said, May hotel occupancy tax deposits, which cover April activity, fell 95% from their budgeted projection. Year-to-date deposits fell by more than 37% compared to 2019 and by 40% compared to the 2020 budget, although those figures are expected to rise this year as hotels and businesses continue to reopen.
Visit The Woodlands Chairman Bruce Rieser said the worst financial effects on the area's tourism industry from recent stay-at-home orders and business closures are likely over.
“I’m actually reasonably encouraged,” he said. “Anything short of a 40% shortfall in the hotel taxes, we can handle fairly easily. It starts to get pretty painful after that. I’m feeling fairly confident that we’ll make that.”
Members also noted that hotel occupancy tax deposits are spaced unevenly throughout the year, which may result in a less significant budgetary shortfall if the local hotel industry rebounds in the second half of 2020.
“The real key is the last six months,” Rieser said. “If we can just get about 35% of the budget in the next six months, which is I think doable, then we’re only facing a shortfall of about $3 million, and we can manage that with the reserves we’ve got with very little pain. So, fingers crossed on this.”
Visit The Woodlands President Nick Wolda also shared a presentation on the bureau’s 2021 financial plans later in the meeting, including two proposals that would reduce its budget for fiscal year 2020-21 by either 15% or 40% from the original budget.
After hearing input from local hotel managers about their outlook for business through the rest of this year into 2021 and discussing the two proposals, the board unanimously voted to continue planning for a 15% reduction to next year’s budget, with the option to shift to the 40% plan if shortfalls continue.
Rieser and Director J.J. Hollie, who also serves as president and chief executive of The Woodlands Area Chamber of Commerce, said they approved of making the more moderate reduction to allow Visit The Woodlands to have a jump start on promoting the area into the future.
“Everybody else is going to be cutting back,” Rieser said. “I would really like to at least appear that we’re going to do almost everything that we normally do to get our community out ahead of everybody else.”
Hollie said he favored the smaller reduction to allow the bureau to continue its regular operations, given that further economic shutdowns are unlikely.
“Especially when there’s so much fear that people hear and see every day, ... the appearance that we are moving forward—that we are doing it in a safe and logical way—is a much better visual than running for the hills,” Hollie said.
Before concluding the session, board members also agreed to consider several proposals for a possible expansion of The Woodlands Waterway Marriott Hotel & Convention Center at their next meeting in July. Wolda said the bureau’s request for proposals approved last November had yielded eight possible plans, three of which he asked to share with the board next month.
“We know that the convention center—now, going on 20 years—is not able to handle some larger groups, and we’ve had to turn away some business,” Wolda said. “We’d like to, as staff, bring some proposals to you in July to take a look at what an expansion would be and what that means for the convention center that is owned by The Woodlands.”