2017-02-16 / Business News

Gauging tourism

Study shows exceptional revenue from visitors to Florida in 2015, but counties are wary about a slowdown.

When Visit Florida, the state’s official tourism promoter, hired an Oxford Economics company called Tourism Economics to detail the effect of tourists on the Florida economy last year, Donald Trump had not yet taken office as the 45th president of the United States.

The numbers for 2015 were glowing: $108.8 billion in spending, or about $300 million a day; $11.3 billion generated in state and local taxes and $13.1 billion in federal taxes; one in every six non-farm jobs supported by visitor spending.

And that was in a tough market.

“Florida has to compete with other domestic and international destinations for every visitor,” Gene Prescott, a Visit Florida board member and president of the Biltmore Hotel in Coral Gables, said in a recent press release.

With the help of Visit Florida, the state was doing one heck of a job, suggested Ken Lawson, president and CEO. “In 2015, our visitors spent $30 billion more in Florida than they did just five years ago.”

LAWSON LAWSON That was true in Palm Beach County on the east coast and in Southwest Florida’s Collier, Lee and Charlotte counties. Each experienced five years of unprecedented growth, according to officials and county growth records.

Now that might be changing, with only Palm Beach County somewhat sheltered from a slowdown. The county is now home to two sports stadiums and four Spring Training professional baseball programs (the Marlins, Astros, Cardinals and the Nationals). In addition to significant arts and cultural attractions, the county now also is home to the winter White House, Mr. Trump’s Mara Lago compound.

Collier, Lee (with the Twins and Red Sox taking Spring Training in two stadiums) and Charlotte counties are not so lucky, depending on one’s expectations of a Trump winter White House.

CORCORAN CORCORAN “In Palm Beach County it’s been a wonderful couple of years, and we hope it continues,” said Glenn Jergensen, executive director of the Palm Beach Tourist Development Council. Tourism generates more than $7 billion in the local economy, including $45 million in bed taxes that now run a penny higher than ever before, at 6 cents, since the county was declared a high-impact county for tourism, by the state, and permitted to raise the rate, he noted.

“Sports is a huge driver of activity. We’ve seen a little softness in terms of bookings (especially from the international market), but now that the elections are over, the other benefit we have is the winter White House. We’re hoping that will be positive. Mr. Trump was here last weekend and he’ll be coming next weekend. Media from around the world arrives, gets updates on what the president is doing — and the sun is out and people are coming by to see the place — we’re hoping it will be like a commercial.”

STEINER STEINER But on the southwest coast from Naples north through Charlotte County, tourism officials confirm that while year-over-year jumps in visitors, spending and hotel occupancy have been consistent, and consistently good, they might be over for now.

In Collier in December 2015, for example, 50 percent of hotels and motels reported an increase in reservations, and 33 percent more said they remained the same. That changed in December 2016, however, with only 12.9 percent reporting increased reservations. Almost 55 percent reported reservations down, according to figures published by the Naples, Marco Island, Everglades Convention and Visitors Bureau.

Another factor that could hurt: The Legislature could eliminate Visit Florida. House Speaker Richard Corcoran is pushing to kill the agency along with Enterprise Florida and several dozen programs and organizations that promote job growth and diversification.

On Feb. 8, proposed legislation that could kill the agency passed the House Careers & Competition Subcommittee.

It moves to the House Commerce Committee. No date has been set for a hearing by that panel.

Proponents say the $76 million in the tax dollars Gov. Rick Scott wants for Visit Florida would be better spent on education, public safety or another priority.

The softening of the tourism market could result from several factors, including politics, especially on the southwest coast and particularly in the market for international travelers.

“We’ve been predicting a slowdown for a while and we’re finally here,” said Tamara Pigott, executive director of the Lee County Visitor & Convention Bureau. “Economies are cyclical, and were at a slowdown point.”

A number of conditions play into that, she added.

“We saw a little decline in hotel occupancy in the fourth quarter, some perhaps from election malaise, some Brexit (the British exit from the European Union). Our United Kingdom numbers are way, way off. We didn’t see it in the third quarter because those trips were booked. Our fourth quarter was less than half of what it was in the fourth quarter in 2015.”

And because international visitors stay longer and spend more money, losing some of that trade makes a big difference.

Lorah Steiner, director of the Charlotte Harbor Visitor & Convention Bureau, was working against that trend last week when the VCB was printing a Charlotte County guide in German — and doing it in Germany, where it will be distributed courtesy of Visit Florida.

“They worked with BrandUSA and made it possible to get videos done in different languages — that was probably responsible for moving the needle 4 percentage points last year,” she says.

In 2017, however, that success might be more limited. The tourist market and its economy are a little less radiant, a trend with an unpredictable outcome.

“This year will be difficult to tell: Are we seeing a cooling off or a reaction in tourism due to Zika or hurricanes or Trump?” Ms. Steiner asks. “The international folks might be upset about Trump — that’s a consideration, how people feel about him.”

Oxford Economics, meanwhile, offered this amended look at the economy, and tourism, in an introduction to a very recent study titled “Effects of a Trump Presidency”:

“The election of Donald Trump has introduced new uncertainty into the outlook for the U.S. travel industry … Trump ran a campaign calling for shifts in foreign, fiscal, trade and immigration policies that have potentially significant implications for the global economy and travel.

“The conclusion of this analysis is that the most likely scenario involves significantly watered-down positions that would produce only marginally slower economic growth in 2017 and 2018 relative to our pre-election baseline scenario.

“But travel is notoriously more reactive to external events. International leisure travelers in particular have discretion in their choice of destinations and readily shift preferences based on any number of real or perceived factors. Given Trump’s protectionist platform, questioning of longstanding alliances, and ‘America first’ rhetoric, it bears asking what effect his presidency might have on travel to the U.S.”

When a research site called Hopper.com looked at data for flight searches from 122 countries in a post-election five-week period, it noted a 17 percent decline after President Trump announced his travel ban (the ban was banned as unconstitutional by the Ninth Circuit Court of Appeals last week).

Covered by various media, the Hopper.com report shows that flight searches with U.S. destinations from such nations as New Zealand, Ireland, Denmark and China all have fallen at least 30 percent, with only searches from Russia going up.

To a veteran tourism champion such as Lee County’s Ms. Pigott, all that comes down to this:

“Travel Research (an analyst) gave us a projection for occupancy in 2017 that shows a slight decline of half-a-percent. Demand is flattening out. We’re maximized on demand, and it’s true of the whole country.

“So the hoteliers are going to be forced to be really good revenue managers — to decide when to drop or increase rates. And I think we’re in for a bumpy ride on the international side. The value of the dollar is strong now and it means the euro and some others currencies are worth less money.”

So what’s the good news?

“When I look out my window and see what we have here — it’s beautiful, it’s safer and visitors want to come back,” Ms. Pigott said. “They want to escape their gray skies and crowded urban markets. And we’re still one of the most naturally beautiful areas in Florida.” ¦

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