HILTON HEAD ISLAND, S.C. — Standing in front of a crowded theater at Park Plaza Cinemas on Thursday, a Hilton Head Island-based media company owner called on several other business owners to assist him in forming a convention and visitor bureau (CVB) that would rival the Hilton Head Island-Bluffton Chamber of Commerce and Visitor Convention Bureau.
The reason, he said, would be to operate in a more transparent manner and give a better return to small businesses than the current organization does.
Peter Buonaiuto, owner of Savannah-based social media marketing firm mediafeedia Inc., said the current chamber is lagging in attracting tourists to the area, despite continuous salary increases for its leaders and employees. He added that the chamber is undercutting its members, particularly some media groups, by profiting off advertising dollars that the companies need to survive.
“We want to change the current model and restore the luster to Hilton Head that has been lost over the last several years and get it back to being a vacation destination for more people,” Buonaiuto said. “A chamber should be a vital resource for all local businesses and the community at large. It shouldn’t be competing against them.”
Buonaiuto said he and associates have worked the last several weeks in preparation of organizing the new group and hopes to apply for state accommodations tax dollars — money paid by tourists who stay in hotel and other local lodging — in the coming weeks to help it get started. However, the group needs to secure $500,000 — $5,000 apiece from 100 individuals or businesses as founding members — to help secure a 50-percent matching fund grant from the South Carolina Department of Parks, Recreation and Tourism. The deadline to apply for the money, Buonaiuto said, is Aug. 4.
“It’s a tight time crunch, but I think we have more than 100 people on the island who would be willing to invest in this and give us a chance to be successful,” Buonaiuto said. “It’s a relatively low investment for the benefits they can get from this if we are successful.”
The group’s efforts are coming at the same time a South Carolina businessman is accusing the chamber of violating U.S. tax codes by profiting off advertising dollars, while also claiming nonprofit status to avoid paying federal taxes.
Skip Hoagland, president and CEO of Domains New Media LLC, has filed a “whistleblower” complaint with the Internal Revenue Service, saying that the chamber is undercutting local businesses by competing with them and, therefore, violating its own mission statement.
Hoagland filed a Freedom of Information Act lawsuit in Beaufort County Circuit Court last year. Because the chamber accepts bed tax money from both the towns of Hilton Head Island and Bluffton — as their designated marketing organization — and Beaufort County, it should be forced to disclose all financial information, Hoagland said.
“The chamber has repeatedly refused to provide me with financial information I’ve requested,” Hoagland said Tuesday from his office in Buenos Aires, Argentina. “I believe there is corruption, abuse and tax violations there, and I intend on proving it and filing as many lawsuits as it takes to fix the problem.”
Hilton Head chamber spokesperson Charlie Clark said Wednesday afternoon the chamber would not comment on ongoing litigation.
While Buoniauto said Hoagland would not be tied to the operations of a new CVB if it is formed, he said he agreed that the chamber is making an excessive profit at the expense of many of its members. Buonaiuto cited federal data, saying that chamber president and CEO Bill Miles has a current base salary of $351,000, which is higher than other chamber leaders in several larger tourism markets around the U.S. At the same time, other chamber employees’ salaries have increased, while the number of tourists to the area has declined since peaking in 1998, Buonaiuto said.
Buonaiuto said he has met previously with Miles and other chamber officials to attempt to access their financial information and request them to change their practices, but was met with resistance.
“The chamber has won a lot of awards and it doesn’t see the need to change, so we’re going to have to reinvent the wheel,” Buonaiuto said. “The chamber needs to be more transparent in its dealings and not try to compete with its members. The chamber should also be separate from the CVB, so we will be able to better tell what the associated costs are and how much is really going toward promoting tourism. Finally, the chamber board of directors needs to be elected, not appointed. Those are the ways to ensuring more accountability.”