Possible cuts in funding for Florida’s tourism markets should alarm hoteliers, and owners and operators need to stress the importance of tourism to their elected officials now more than ever.
While smaller government is a concept a lot of people can embrace, one area where that idea doesn’t make sense is in economic development—and in the case of the travel industry, destination marketing. That’s why I can’t understand the insane thinking among some Florida politicians who are threatening to slash funding for or completely eliminate Visit Florida, the state’s very successful tourism marketing agency.
Owners and operators of Florida hotels need to vigorously lobby their elected officials to make them understand the importance of tourism—and the taxes it generates—to the state’s image, its economy and its future.
On 10 March, the Florida House passed legislation that has the potential to significantly cut funding to the agency and restrict how it uses the funds. If passed by the state Senate, Visit Florida officials would need to negotiate funding levels with the legislature and require any funding to be matched by state dollars. Another bill in the legislature would kill Enterprise Florida, the agency charged with overall economic development for the state.
A number of politicians in the state have been campaigning to either close Visit Florida or reduce its annual budget by two-thirds, which in 2016 was $78 million.
These potential legislative actions come as the state’s tourism industry—with a few exceptions—is enjoying record levels of visitor arrivals and economic impact. In 2016, Florida did something no other state has ever accomplished in attracting nearly 113 million visitors to its beaches, theme parks and other attractions. Visitor volume was up 5.9% over the previous year, and 2016 was the fifth year in a row of record tourism numbers.
In 2015, Florida tourism generated $89.1 billion in economic impact and employed 1.2 million people. Put another way, on any given day, more people are visiting Florida than live in 13 U.S. states.
The prospect of diminishing tourism volume should especially alarm hoteliers from South Florida, which experienced weak performance in 2016 due to a combination of factors: Hurricane Matthew, the Zika virus outbreak, the growth of Airbnb, potential overbuilding and economic weakness in its Latin American feeder markets.
The impetus for shrinking or possibly killing Visit Florida came from a possibly ill-advised contract the agency signed last year to pay $1 million to rapper and native son Pitbull to appear in marketing campaigns for the state’s tourism sector. The agency’s CEO resigned over the controversy.
Those in favor of killing Visit Florida would say the state will probably also host 100-plus million visitors this year and beyond even without the promotional efforts of the agency. Perhaps that would be true this year, and maybe even next, but eventually that volume of visitation would fall.
Data from U.S. Travel shows how levels of tourism promotion spending at the state level can affect tourism. In Pennsylvania, legislators cut tourism spending from $30 million in 2008 to $7 million in 2015, resulting in shrinking travel market share among states with which it competes for tourism dollars.
By contrast, New Mexico saw a 45% increase in overnight trips to the state following a multi-year marketing campaign and a jump in tourism promotion funding from $2.2 million in 2011 to a proposed budget of $9.6 million this year.
Similarly, if Visit Florida isn’t in business to promote the state’s tourism industry, other accessible warm-weather destinations—the Caribbean, Cancun, South Padre Island are the prime ones—will steal share of mind and share of wallet among fickle consumers.
Other wild cards are the potential long-term impact of the nation’s immigration policies and the strength of the U.S. dollar. Both factors could discourage international visitation to the U.S., a trend that is especially harmful to gateway cities like Miami and tourist hotspots like Disney World and Florida’s warm-weather venues.
No matter what happens in the legislature regarding Visit Florida, the state’s tourism industry is bound to have another solid, and perhaps record-breaking, year in 2017. And as long as the economy continues to grow and consumers remain confident, Florida will be a popular vacation spot for many years. But if the U.S. and world economies begin to falter and consumers become more cautious with their vacation spending, those states and countries with strong destination marketing efforts will be able to at least tread water and steal market share from competing destinations.
Given the current political climate in the state, Florida and its hotel and tourism businesses could be losers in that scenario.
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