The shadow of House Bill 2 continues to hang over the North Carolina travel and tourism industry 19 months after its partial repeal, according to Visit NC officials Tuesday.

The law, which went into effect in March 2016, was known foremost for requiring transgender people to use restrooms, locker rooms or showers in government buildings and schools that aligned with the biological sex shown on their birth certificate, not their gender identity.

Republican legislative leaders said the law was meant to promote privacy and safety. They pushed HB2 after the city of Charlotte passed a nondiscrimination law in 2016 that included allowing transgender people to use public restrooms aligned with their gender identity.

After North Carolina experienced a national push back from HB2, a bipartisan compromise, House Bill 142, was passed in March 2017 by the Republican-controlled legislature and signed by Democratic Gov. Roy Cooper.

HB142 did away with the restroom, locker room and shower use requirement. It also implemented a moratorium through Dec. 1, 2020, on local anti-discrimination ordinances.

After HB2’s repeal, the NCAA and ACC agreed to return championship tournaments to venues in the state after a one-year absence because of HB2, and the NCAA awarded 26 events for the 2018-22 championship cycle to North Carolina venues. The NCAA stressed in April 2017 that HB142 achieved the minimal requirements to make state venues eligible again.

“HB2 isn’t as bad as it was, but there’s still people who bring it up when discussing visiting our state,” Wit Tuttell, the executive director of Visit NC, told tourism leaders as a presentation in Winston-Salem.

“Some people, depending on your politics, feel that (the amendment) is HB2 in different language,” Tuttell said.

Six states — California, Connecticut, Minnesota, New York, Vermont and Washington — and several major cities — Chicago, Seattle, San Francisco, Salt Lake City and Santa Fe, N.M. — continue to ban government-financed travel to North Carolina, including collegiate athletic teams.

“Meetings, sporting events, films are still experiencing it,” Tuttell said.

On Oct. 1, a federal judge ruled that transgender people are not barred from using restrooms and other public facilities that correspond to their gender identity under HB142.

U.S. District Judge Thomas Schroeder also allowed a legal challenge to go forward on part of the new law that prevents local governments from passing any anti-discrimination ordinances.

Tuttell said he is hearing concerns from in- and out-of-state tourism officials that N.C. legislature leaders may try to work around, or even ignore the ending of the anti-discrimination ordinance moratorium.

“Each destination will have to deal with (those concerns) on their own way if the state legislature has its own message,” Tuttell said.

State Rep. Donny Lambeth, R-Forsyth, said he has “not heard any new information on this issue. I would assume some of the leadership is working on this, but I do not know what is next step.”

Film, TV production hurt, too

Tuttell said North Carolina’s film industry continues to struggle to regain business, particularly from Hollywood production groups, after the state legislature’s dramatic cutback on industry incentives in 2014.

That’s even after the legislature approved in 2017 establishing a 25 percent spending rebate and providing $31 million annually to performance-based grants.

Obstacles remain overcoming Hollywood concerns about the annual stability of North Carolina’s film-production grants, as well as lingering concerns about HB2.

Officials with the N.C. Commerce Department and Visit NC sought in March to remind Hollywood that North Carolina’s grant program currently has a $65 million pool. The $31 million in annual funding rolls over if not spent.

Over the past six months, there have been just two takers of the film grants. One was a Home Depot advertising campaign in High Point that qualified for up to $500,000 for direct in-state spending of $2.5 million. The other project is a feature film in Wilmington titled “Words on Bathroom Walls” that could qualify for up to $2.35 million based on direct in-state spending of $9.3 million.

Guy Gaster, the director of the N.C. Film Office, said in March that even though much of HB2 was repealed, many film production companies still don’t have North Carolina on their radar screen, particularly compared with Georgia.

“It only takes one key person saying they’re not comfortable with being in North Carolina to kill our chances at a production,” Gaster said.

Tuttell said in March that although Disney and ABC haven’t said it publicly, “they will not film in North Carolina right now.”

Tuttell said Tuesday that the annual changes in how the grants are offered, including how production companies qualify, is complicating Visit NC marketing pitches.

New campaign

In terms of attracting tourists, Tuttell said the “Firsts that last” marketing campaign that debuted in the spring has moved the needle in the six targeted markets — Atlanta; Columbus, Ohio; Nashville, Tenn.; Orlando, Fla.; Philadelphia and the District of Columbia.

“Our site visits from those six markets are up 85 percent overall,” to 842,006 through August, Tuttell said. “We’re pitching legislators on the campaign in hopes they will see the return on investment and expand funding for it.”

Tuttell said Eastern North Carolina, particularly the coastal attractions, face a long-term challenge in recovering from Hurricane Florence, in particular convincing tourists they can have a viable and relaxing vacation with their last memory of the state being hurricane damage.

“The storm has cost the state about $500,000 a day in tourism spending,” Tuttell said.

“Most of our coastal hotels are filled to occupancy, but it’s not with tourists but rather evacuees and recovery workers.”

The problem with that use of the hotel rooms is that once someone stays for more than three months, the hotel occupancy tax is no longer collected from facilities in those counties.

“We’re trying to convince legislators to support providing funds in their recovery packages to help offset the hotel occupancy tax losses until those areas fully recover,” Tuttell said.

He also mentioned some concern about the number of hotel rooms in the state edging toward more supply than there is demand.

“We need to keep demand up to meet the supply,” he said. “We don’t want to go through another boom-and-bust cycle where we start dropping rates and cannibalizing each other.”

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Winston-Salem Journal reporter Michael Hewlett contributed to this article.

rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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