This column was published in the Northwest Florida Daily News on Sunday March 2, 2017.
I’ve been asked a number of times to explain how bed tax, or Tourist Development Tax, is used. There also have been some letters suggesting that it be used for items or services that aren’t currently covered, so I thought a brief explanation might be useful. Please bear in mind that I’m not a lawyer, but it would appear that even some lawyers can’t agree on the interpretation of some bed tax clauses, so I’ve gone with what the TDCs, tax collectors and others usually use.
You may remember that bed tax was set up to be charged on short-term rentals in designated tax areas. Some counties implement across the whole county (Escambia for example) while others have specified tax areas (e.g. Okaloosa and Walton). The tax is collected by the rental companies and hotels, and paid to the tax-collecting body of the county. Owners can pay direct to the county, too.
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Navarre Beach.
Last month, we discussed how some politicians in Tallahassee, the Florida State capital, were playing politics with the future of Visit Florida, the State’s destination marketing organization. That fight isn’t over as we’ll report.
This month other politicians both here in the USA and in other parts of the world are having influences on tourism in ways they cannot predict.
Good news however is that Culinary Tourism is booming. Read on….
Political shenanigans
The move by Speaker Corcoran to de-fund Visit Florida continues, although he has indicated that he no longer wants to close the organization down, merely to limit its ability to operate and drastically reduce its budget. Governor Scott is fiercely fighting this along with the Tourism Industry and it would appear, members of the Senate. The fight is not over and if you’re involved in the industry in Florida, I urge you to a) contact your representatives to support Visit Florida and b) attend Tourism Day in Tallahassee this month to lobby in person. Please contact me if you need details of how to attend Tourism Day.
In what promises to be a difficult year for international tourism, further obstacles are being dreamt up by politicians on either side of the Atlantic.
The strong US dollar has the potential for discouraging European tourists in particular from visiting the USA this year. Some of those European economies are not strong currently and the USA could be expensive for them.
We now have the three year-old dispute between the EU and the USA over visas. The EU parliament consider that the countries of the community should be considered as one (that has resulted in the UK wanting ‘out’ with their Brexit vote), although the US still recognizes individual states. The US has refused to allow some EU states access to the Visa Waiver Program which allows visa free travel into the US. Poland, Croatia, Bulgaria, Romania and Cyprus don’t meet the US security requirements. The EU has said that either the US accept these countries or all US Citizens will require visas to visit any EU country.
This is an old dispute and has now reached the ‘Who blinks first’ stage. Despite the strong dollar which makes overseas travel attractive, American tourists would be very discouraged if they were required to get a visa. Europe needs those US dollars after a lackluster 2016 tourist season following terrorist attacks, and although advance demand has been strong, it wouldn’t take much to scupper that.
Traveling the other way – east to west – is also potentially threatened. I mentioned the strength of the dollar being a hazard, but what has been called the ‘Trump Effect’ is apparently causing a softening of travel demand. I’m not making any political points, just reporting on figures coming from sources in the tourism industry.
It appears that first announcements of a travel ban had a detrimental effect on European tourists plans to visit the US. I’ve been asked why, say, a German tourist would feel threatened by a ban on travelers from certain middle east countries. I can’t answer that easily, but believe me they are worried. Even the UK tourists who believe they are part of a ‘special relationship’ with the US, are as a group being cautious. Suffice to say that enquiries for flights to the US are down an average of 22%. Tourism research firms are projecting a loss of 6.3 million visitors ($10.8 billion in lost revenue). The tourism board of New York City has predicted that 300,000 fewer tourists will visit than did in 2016. Previously New York was predicting an increase of 400,000. Philadelphia has already lost one conference worth an estimated $7m as a result of the proposed travel ban.
Even the Canadian market is seeing a drop in the number of tourists intending to travel below the 49th.
That’s International tourism of course and it’s been suggested that it won’t affect US destinations that don’t cater for Internationals (like Northwest Florida, where only 1% of tourists are from outside the US). That may be true, but of course the markets that attract overseas travelers are hardly likely to sit and do nothing. They will want to find domestic tourists to replace the foreigners and they are not averse to creating marketing campaigns and making offers to lure those domestic guests away from places like the Northern Gulf Coast.
As the old Chinese curse says “May you live in interesting times”.
It’s not all bad news though…..
95% of travelers have said that they engage in unique and memorable food or beverage experiences while traveling, according to the World Food Travel Association ( I guess that they would say that!). Another research organization, Destination Analysts, claim that 50.7% of Millennials won’t visit a destination that doesn’t have good restaurants – although they don’t define what makes a good restaurant.
Before you state that Millennials are just children, remember that the first Millennials turn 35 this year! Also important is that the Centennial Generation (Generation Z or ‘Post Millennials’) are now just beginning to enter the workforce, so are beginning to effect the market.
Certainly the younger generations are having a strong influence on their parents and grandparents when it comes to food. A recent report by the HAAS Center (part of the University of West Florida) was created to examine tourism trends in Okaloosa County (home to Destin, Fort Walton Beach and Okaloosa Island). They found that although tourist spending in restaurants in the county increased in 2015 more than 15% over 2011, its revenue per seat had grown only 12%, where peer and competing counties had grown by 28%. The competing counties are where most (but certainly not all) of the new and more creative restaurants are found. Interestingly, the area has seen an increase in the number of up-scale grocery stores (Whole Food Market, Fresh Market and Publix). Whereas in 2011 tourists spent twice as much in restaurants as they did in grocery stores, it’s likely that 2016 will see tourists spend more in grocery stores than in restaurants for the first time.
The take away (sorry!) is that those tourists are seeking culinary experiences, and finding them.
Which brings me to the really good news for my home area. I recently attended the Florida Restaurant and Lodging Association’s annual awards ceremony for the North West Florida region. The display of talent at that event was stunning. The quality of the areas chefs, wait staff and managers was exceptional and their depth of knowledge, experience and creativity was at least a match for more recognized tourist areas. A similar level of expertise was evident in the hotel, resort and accommodation sector.
That Culinary Tourism is growing makes really good news for the industry as a whole. It’s also great for The Northern Gulf Coast of Florida. The Tourism Industry worldwide is going for Culinary Tourism in a big way from the traditional destinations of Europe to the New World and areas like Australasia. Even Costa Rica getting in on the act. Don’t underestimate the Cruise lines either.
This article appeared in The Northwest Florida Daily News Talking Tourism Column on Sunday, February 26.
There is trouble in Tallahassee. Some lawmakers wish to defund and close Visit Florida, the state’s Destination Marketing Organization (DMO) and tourism promoter. There are a large number of people who are opposed to this — to be honest, the whole of the tourism industry. I don’t wish to be political, but you know I’m unashamedly pro-tourism, and I thought you may like to know what the two sides are presenting.
In one corner is Speaker of the House Richard Corcoran, R-Land O’Lakes, who feels that state tourism neither works nor is necessary. Not only is Corcoran proposing to defund Visit Florida, he’s proposing that local DMOs also be wound up. The argument is that tourists came before the state started marketing, and will continue to come regardless.
Opposing is the tourism industry — hoteliers, restaurants, theme parks, charter boat captains, attractions, guides, housekeepers, waiters and waitresses, taxi and Uber drivers — and anyone who does business with the tourism industry (in total, there are 1.4 million tourism job holders in Florida). This group believes that in the competitive tourism marketplace today (where Florida not only competes with New York, California and other states, but with the countries of the Caribbean, Europe, Australasia, the Middle East, India, Asia and South America) a public/private funding partnership is essential for continued growth and, indeed, just to maintain position.
We just spent a long weekend in New Orleans, which is one of my favorite cities. It’s totally unique. I was first introduced to NOLA in 1972 as a young travel agent on a U.S. tour (seven cities in 10 days!). Being taken to Bourbon Street as a 20-year-old was quite an eye-opener. Luckily my wife lived in New Orleans for quite awhile and really is “local,” so we’re not exactly tourists when we visit at least four times a year.
The city is a real case study for tourism, joining an historic center with a mix of cultures plus being a living, thriving business hub. It has nearly year-round tourism, although the local businesses are only too aware when they have fewer tourists. The Crescent City is known world over for Mardi Gras (or Carnival, as the locals term it) which is both a blessing and a curse as it attracts enormous numbers of tourists. Those tourists tend to consider partying an Olympic sport, which adds a whole new level to tourist management. Natural events like Hurricane Katrina also have put an added strain on the city, and its recovery from a tourism point of view has been nothing short of remarkable.
The great thing about NOLA ………
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This month’s newsletter is unashamedly aimed at my tourism colleagues in Florida. I’m not usually given to being political (This is not political on party lines) but recent proposals to discontinue State support for Visit Florida and local Destination Marketing Organizations is a major concern for anyone even remotely connected to the industry.
The proposals, by Speaker of the Florida House, go further than removing funding from Visit Florida but wish to dismantle and abolish the organization totally.
For those of you in other US States, and indeed in other countries, you should be aware of this issue as it could be coming to your area too. Many politicians, world wide, fail to recognize the benefits of tourism to both their economies and to the benefit of mankind generally. Not only does travel “broaden the mind” but tourism promotes understanding of cultures and enables peoples to just get on with each other.
But back to Florida.
In 2015 Florida welcomed 106.6 million out of state and international visitors. The international travelers came from 190 different countries. This means that one in five international visitors to the whole USA come to Florida.
Those visitor’s sending supported 1.4 million jobs in the state and every 76 visitors supports 1 job. They spent an average of $300 million per day in 2015 – a total of $108.8 billion, which in turn generated $11.3 billion in sales tax.
We have had six straight years of record tourism spending.
For every $1 that the state of Florida invests in tourism, $3.20 in tax revenue is generated. That’s a 320% return on investment. Where else could you legally generate that sort of return?
If the proposals to defund Visit Florida go ahead, then tourism figures will suffer. Just a 5% drop in visitors would mean a loss of $5.5 billion in revenue, $563 million in taxes and a loss of 70,000 jobs.
Local fishing and tourist related industries (which is virtually every business in Northwest Florida – Remember the effects of the Oil Spill?) would all suffer. The Destin fishing fleet alone brings in $173 million in after value dollars to Okaloosa and Walton counties and the city of Destin. 90% of those dollars come from out of state tourists.
Colorado tried this and they lost 40% of their leisure traveler market over three years and revenues declined by $134 million.
Without the state and local taxes generated by tourism, each Florida household would have to pay $1,535 just to maintain the current level of government services.
We would also have to have State Income Tax, which we avoid currently. Tourists pay over 24% of sales tax, which is the sole reason we don’t have a state income tax.
Pennsylvania cut their budget in 2009 from $30 million to $7 million. Every $1 cut from the tourism budget cost $3.60 in lost tax revenue. From 2009 to 2014 Pennsylvania lost more than $600 million.
Washington State cut their budget from $7 million to $0 in 2011. Their competing state, Montana grew their tourists 70% faster than Washington.
Colorado cut their $12 million budget to $0 in 1993 and lost $1.4 billion in traveler spending within one year. Tax receipts declined by $134 million from ’93 to ’97. 18 years later Colorado still hasn’t recovered their market share.
Increasing the tourism budget has increased travel spending in many states, for example –
California increased their budget $50.1 million and travel spending increased $32.4 billion.
Florida increased the budget $43.3 million and travel spending increased $30 billion.
Minnesota increased their budget $10.5 million and travel spending increased $3.5 billion.
New Mexico increased budget $4.6 million and travel spending increased $933 million.
(Figures from Roger Dow, Head of U.S. travel)
It is essential that the tourism industry in Florida – all members and all levels – get behind the action to save Visit Florida and indeed all the Destination Marketing Organizations. Failure to do so will result in critical loss of jobs, drastic loss of tax revenue, and severe hardship for tax payers in the State.
To cut funding to Visit Florida and other DMOs is bordering on insanity. No business person in their right mind would take this sort of action.
As a consultant to the tourism industry my advice – given free, gratis and for nothing – is to resist this move strenuously.
This article was published in the Northwest Florida Daily News on Sunday January 14, 2017.
When I was 16, one of my greatest goals was to learn to drive. I bought an old car to do up when I was 15 and had my first driving lesson the day I became legally eligible. My friends did the same. During my late-teens and twenties (in the UK), my friends and I thought nothing of driving all over Europe for our vacations. Evidently it was the same here in the United States, and that had a particular effect on the Emerald Coast tourism business.
Well over 90 percent of Emerald Coast leisure visitors drive to our piece of paradise, with many loading up the car and driving 10 or 15 hours to visit. It’s been that way for 40 years.
Like everything else in tourism, things are changing. My children live in New Zealand – one is 28, the other 24 – and neither can drive or have any wish to learn. The same thing is happening in the U.S. The Federal Highway Administration reports that every demographic is losing interest in driving. Between 2011 and 2014, two particular age groups – 16-year-olds and those in the 20-24 range – stopped getting driver’s licenses. For 17-year-olds, the percentage of licensed individuals fell from 45 percent to 44.9 percent. Similar reductions happened across all age groups.
I’m not one for making resolutions, mostly because I change my mind so much! If you want to change something, better to just to get on with it than wait for some arbitrary date to start. That’s my excuse anyway. Similarly, looking backwards doesn’t help because we can’t change what has past – although as numerous people (apparently) are quoted as saying – if you don’t remember past mistakes, you’re doomed to repeat them!
So, in the interests of progress, let’s look forward.
I’ve read two articles over the end of the year break that I felt were right on point. I’ve attached links to these so you can read them yourself.
The first was by anti-aging & sports medicine pioneer, and futurist, Dr Robert Goldman (http://ow.ly/Akd9307C9Bt). Dr Goldman pointed out some of the changes that society will be subjected to over the next few years. What is most striking is the speed at which these changes will take place. I remember talking to a scientist with British Telcom back in the early ‘90s who said that they knew absolutely what developments would arrive within 5 years; they had a pretty good idea what would happen in the next 10 years but beyond that they were ‘wishing and hoping’! as Dr Goldman suggests we are now in the exponential age, where changes occur at an ever increasing rate. In many cases these changes happen faster than most businesses can adapt. If you read the article you’ll see that many developments will directly affect the Travel and Tourism Industry.
The second piece was by Christopher Elliott in the Washington Post (http://ow.ly/Hrvl307C9Ob). Chris is suggesting that 2017 is the year many people, especially Americans, won’t be traveling on vacation. He cites many reasons and offers suggestions of how as a tourist you can benefit (please go and read it!) but for those of us in the industry there are three main takeaways. That tourist will be looking for alternative accommodations, authenticity and satisfying their needs for instant gratification.
I’ve talked to many travel and tourism professionals over the past year and we’ve discussed the inevitable changes that are happening and I can’t think of anyone who has disagreed. After all, the signs are really clear – very ‘in your face’ as it were. However, many are not willing to accept the speed of changes.
Take ‘alternative accommodation’ – Airbnb in particular. Home sharing has expanded incredibly rapidly. Airbnb are now the largest accommodation provider in the world with over 2.5million homes (incidentally, they own no hotel rooms!) yet most of the vacation rental companies here in Northwest Florida’s Northern Gulf Coast seem to think think they are not a serious threat to their business model.
The past year the 1.5 million guest arrivals to Florida via Airbnb represent 114 percent year-over-year growth. This comes as Floridians increasingly embrace the home sharing platform as an opportunity to earn supplemental income and make ends meet. The Airbnb Florida host community grew 74 percent in 2016 to a total of 32,000 hosts.
Yes, the local industry says, but it’s in cities, not here.
This is the total supplemental income earned by Airbnb hosts in our local counties:
Bay County $4.9 million
Walton County $3.3 million
Okaloosa County $2.9 million
Escambia County $1.8 million
Santa Rosa County $683,000
That’s a total of nearly $13.6 million. True, it’s only 10% of the income from Miami-Dade alone, but its still remarkably significant.
People love the idea of either staying with a local host, or staying in the home of a host which they perceive differently than the relatively anonymous experience of a cookie cutter condo or a ‘standard’ hotel room.
This contributes to the ‘authenticity experience’ that comes from home sharing, boutique hotels and the like.
Chis Elliott also refers to ‘Instant Gratification’. I know I’m always talking about the attitudes of Millennials and younger Boomers but they do have have a seemingly out of proportion effect on our industry. Their behavior appears to affect the other sectors of our audience too. The ubiquity of smartphones and the ability to access information from wherever you are, makes the almost impulse decision to book a vacation all too easy.
You’ve bought things on Amazon. How many times have you been tempted by the ‘people who bought this also bought this’ suggestion?
Think what will happen when someone suggest “How about we go to The Gulf of Mexico next weekend?”. You look at your phone and up pops the local CVB websites – you see what events are happening, and guess what? You can book the Airbnb accommodation right there, and the concert tickets, and the Uber from the airport. Of course there was link to book flights too but you’ll probably want to do that with the airline because you get your miles there – and suddenly Delta Air Lines are offering 1 mile for every $1 you spend with Airbnb if booked through them – oh, and Uber credits too.
We have a change to the whole vacation booking experience, which is not taking 5 or 10 years to develop but is happening as we speak.
Put a note in your calendar to contact me at the end of 2017 and tell me if there have been no changes to your tourism business during the year. To be frank, I don’t think you’d be able to do that by June!
Whatever happens is going to be exciting. The evolution of the world’s biggest industry has always been fascinating and the near future won’t disappoint I’m sure.
Please follow the Owen Organization blog on www.owenorganization.com, sign up for the newsletter and follow us on Facebook at www.facebook.com/OwenOrganization. Lastly, check out the weekly ‘Talking Tourism’ column in the Northwest Florida Daily News every Sunday.
I live in a tourist town. It’s a great feeling actually living somewhere that people save up their cash and time to visit on vacation. Well most of the time! I do sympathize with other locals who find their lives disrupted during ‘the season’ by what they perceive as traffic gridlock, full restaurants, and sometimes inflated prices, but I have a slightly different view, brought on by my lifetime obsession with tourism and the fact that my income is directly dependent on it.
Growing up, I lived near London and just ten miles from Windsor Castle and a host of other tourist centers. At one time it was common for residents to wear button badges saying ‘I’m not a tourist – I live here’. I must confess that when you’re trying to get to a business appointment, or just grabbing a lunchtime sandwich and you’re held up by a bunch of visitors with no perception of time, personal space or local customs it can get a mite, shall we say, irritating!
Having it pointed out to me that if it wasn’t for the tourists, I probably wouldn’t have a job, or the local amenities I enjoyed, didn’t initially help, but gradually I got the message and came to be tolerant and then respect (I think love may be going too far!) the visitors.
So, living in a tourist area has its challenges but what can those of us in the industry do to convince our fellow residents, who may have no immediate connection to tourism, that it’s a good thing to be in a place that others want to visit?
Destination Marketing Organizations have a duty to promote their areas to tourists. It’s their whole raison d’etre, but it’s my feeling that education of the locals is also a duty. DMOs do need to firstly let their residents know how they are promoting, what they’re promoting and importantly, why. Many residents think that visitors know an area exists and therefore promotion isn’t needed. It’s a fair point, but obviously incorrect to those of us involved.
It’s pretty pointless running ads in local media if you’re trying to attract visitors into a market, but you should at least share the ads you’re running out of market so that your locals know and understand what’s happening.
It’s also no bad thing to tell your locals why tourism is so important. Here in Florida there is no state income tax. That’s because 24% of sales tax is paid by tourists, so for locals that’s a very good thing and something of which they should be aware and not forget. It also matters that for someone who doesn’t think they work in tourism, that they see how their income is invariably linked to the success of local tourism, however indirectly. Nobody but the DMO is in a position to share that information.
A wise hospitality professional once referred to a line of visitors cars clogging a road as ‘every one being a credit card on wheels’
Lastly, there’s room to involve the locals in helping tourists. Who but a resident knows the best restaurants, or best attractions? Who else would know the history of a place, or indeed where to avoid!
Perhaps the DMO should issue button badges that say ‘I’m a local – ask me’!
*’Grockle’ is an informal and often slightly derogatory term for a tourist. It was first popularized because of its use by the characters in the film The System (1964), which is set in the Devon resort of Torquay during the summer season. Some older dictionaries suggested that it might be an English West Country dialect word.
