In the News - July 2023

As former head of the U.S. Travel Association for 17 years and a Marriott executive for 34 years, I’ve worked closely with destinations around the country. Funding models vary, strategies vary, and results most definitely vary. I’ve seen state governments in Colorado and Washington cut funding only to set them back years in tourism revenue. I’ve also seen others, like Orlando, become tourism powerhouses. As a Florida resident, I’m closely watching the current conversation around Orange County Tourist Development Tax (TDT) funds. The rhetoric around expanding the usage beyond its original intent ignores the root of the problem, is shortsighted and dangerous to the future of Orange County’s tourism and tax revenue.

Don’t get me wrong. There are good intentions at play here. Affordable housing is a noble cause and a big concern, not only in Orange County but across the state. That’s why the Sadowski Affordable Housing Trust Fund exists. The fund dedicates a part of the documentary stamp tax paid on all real estate transactions to an affordable housing-specific trust fund.

However, since the early 2000s, state legislators have raided the fund yearly, using the monies to fill budgetary shortfalls. In fiscal year 2019-20, only $85 million of the $350 million available in Sadowski funds were appropriated for affordable housing.

To shrug off this problem, instead of proposing new funding streams, is akin to having two buckets of water — one for drinking and another for watering crops. The drinking water bucket has a leak. The bucket for crops is fully intact, making crops flourish. With the crops doing so well, do you start siphoning off crop water for drinking water and let the leak continue? Or do you fix the leak?

Now, more than ever, with the recent travel bans announced and conventions canceling, TDT funds must be reinvested in marketing our destination. Reinvesting sustains and grows the industry that consistently produces a measurable return on investment to Orange County. This investment creates jobs, increases sales tax collection and makes Orlando a better place to live, work and play.

Orange County’s tourism is an economic engine that funnels significant money to local needs like roads, affordable housing, schools and more through a 6.5% sales tax. Last year, Orlando led the nation with 74 million visitors, who spent their money on hotel stays, attractions, three meals a day, Mickey ears, Harry Potter wands and more — all paying that 6.5% sales tax. Annually, visitors pay more than 50% of Orange County’s sales tax revenue. To keep fueling those funds, you’ve got to ensure that visitors keep coming.

Every year, the visitor count starts back at zero. Pulling back on tourism promotion because you think individual organizations can do the job on their own is shortsighted and dangerous. Like any product, you must reinvest. Do brands, like Coke, say forget it, they know who we are, no need to advertise? Of course not. To remain the industry leader, you’ve got to spend money. When Colorado’s tourism promotion budget was eliminated, it took 21 years to regain visitation after funding was reinstated. When Washington’s tourism budget was slashed, neighboring states jumped on the chance to steal market share and flourished, while Washington struggled until seven years later when their budget was restored.

Orlando has long been the leader in the tourism industry — in Florida, the US and internationally. Success cannot be taken for granted. Orlando’s competition isn’t just cities like New York and Las Vegas; it’s the state of California and entire countries like Mexico, Spain and extremely well-funded China. And yes, TDT brings in more money than the original legislation could have ever imagined. When eggs were 86 cents for a dozen in 1979, I could have never imagined they would cost over $6 today. It is more expensive to do everything, including staying ahead of the competition.

Trust me — California is hoping Orlando will cut tourism promotion and lure back all the visitors Orlando captured from them the past three years.

That’s why protecting the current usage for TDT is essential to the future of Orange County. To address the problem, first, fix the leak. To drive tourism, continue to invest. It’s that simple.

Roger Dow is the past president and CEO of the U.S. Travel Association. He lives in St. Petersburg.