Currituck penalized for its tourism success

North Carolina lawmakers really ought to have an "oh!" moment when they hear the story of Currituck County's success in attracting visitors to Corolla and other tourist spots.

Last year, the county spent a total of $33,650 to buy two ads in Oprah Winfrey's magazine, O. The ads, as The Pilot's Jeff Hampton reported this week, generated 14,312 requests for more information, about a thousand shy of double the amount for the second-most productive ad. The cost per "lead," or information request, was $2.35 for the O ads - well below the $5-per-lead maximum generally recommended by the tourism industry.

The response to the advertising campaign is yet another reason for lawmakers in Raleigh to reconsider the rules they impose on the use of hotel and rental occupancy taxes by counties and cities.

State law requires Currituck to spend one-third of its yearly occupancy-tax revenue on advertising designed to lure more visitors to the county. The remainder must go toward tourism-related projects, such as beach renourishment, parks or extra law enforcement in tourism areas.

The premise of the law is basically sound: reinvest part of your earnings to help boost your earning potential. Apparently, it's paid off for Currituck; tourism spending topped $120 million in 2006, about three times the total a decade ago.

But, as County Manager Dan Scanlon recently told The Pilot, "at some point you feel like you're going to get diminishing returns" by spending more and more on marketing.

In the current fiscal year, Currituck officials expect to collect $9 million in occupancy taxes. They plan to spend $2.3 million on marketing and tuck another $700,000 into a marketing reserve fund that already contains $3 million.

Currituck officials, eyeing that growing pot of money, have been asking the state to loosen the rules and allow them to divert some of the occupancy tax proceeds to other needs, such as schools and utilities.

There's some peril in that proposition - tourism advertising is likely to grow more vital in the months ahead because of high gas prices - but North Carolina's General Assembly should look at making the restrictions more flexible.

If local governments like Currituck can demonstrate they're (1) using their ad money efficiently and (2) expanding their tourism base, they should be given more leeway to steer some of the revenue toward other legitimate needs. After all, a county's overall quality of life and economic health are important to tourism appeal, too.