Visit Florida May Be Out 30 Million In Tourist Attraction Funds
Written by Ted Carter on January 15, 2009
By Ted Carter
Heading into the final five months of its fiscal year, Florida’s tourism promotion agency is expected to be minus nearly $30 million for advertising buys and other efforts designed to draw visitors to the Sunshine State.
The move has alarmed Visit Florida, the state’s visitor development arm, as well as hospitality sector leaders and some legislators. At risk, they say, is the $65.5 billion that Florida’s visitor industry is projected to generate this year, in addition to more than 140,000 hospitality sector jobs.
State Rep. Joe Gibbons, a Hallandale Beach Democrat and member of the House Transportation and Economic Development Appropriations Committee, said he reacted with a "you must be crazy!" when plans for the cuts landed before his committee. "Tourism is the economic engine of our state," he said.
It’s hugely counterproductive, said state Rep. Franklin Sands, a Weston Democrat and House minority leader, in an appearance Sunday on political journalist Michael Putney’s "This Week in South Florida."
"Visit Florida is a revenue generator. For every $1 spent we get back $58," Rep. Sands said, citing a return-on-investment report compiled by Visit Florida researchers.
The agency said it came up with the $58 figure by dividing the cost of the advertising by overall direct spending generated by the incremental trips for which the marketing was deemed responsible.
Further, agency researchers say their calculations show each $1 of advertising generated $3.50 in incremental tax receipts.
Leaders in the Republican-controlled House and Senate say the steep reductions in visitor promotion spending and other cuts are vital to the state’s fiscal survival amid a deepening recession. Just as business tightens its discretionary spending in hard times, they say, so must the state.
They also note that unlike other parts of the state budget that are seeing cuts, tourism marketing has been the beneficiary of spending increases in recent years. Legislators allocated $35.5 million to the visitor agency in the 2008 session.
At the start of the week, Visit Florida’s share of the state’s efforts to erase $2.3 billion in red ink stood at $9.9 million, a sum that positions the public-private agency to lose another $19.8 million in contributions from private-sector partners. Under Visit Florida’s current funding formula, the partners — which number more than 3,500 — pitch in $2 for every $1 of state funding.
House and Senate leaders agreed to the $9.9 million cut Sunday, lowering it from a previously proposed $13 million. Both houses were to vote on the tourism cuts as well as a host of other state spending reductions as early as Wednesday. The special budget session is scheduled to end Friday.
Visit Florida’s new chairman, Amelia Island Plantation marketing chief Richard Goldman, said the visitor agency and its board do not want to be involved in an open brawl with state political leaders over the cuts. "We’re trying not to be terribly over-reactive. We’re hoping for the best."
He conceded, though, that the timing is troublesome, coming with five months left in a fiscal year that is already showing increasing declines in hotel and restaurant receipts. "Having to take it in the last five months of the fiscal year is rather difficult," Mr. Goldman said.
With its budget for the year set last spring, Visit Florida "committed a lot of ad dollars for this year," including the next five months, Rep. Gibbons said in pointing out the bind in which the agency has found itself.
Rep. Gibbons said he expects the real drop-off in tourism visits from the marketing cutbacks won’t occur until 2010. Then a rush by lawmakers in 2010 to restore the marketing money would not have any effect until 2011, he said.
Last year, Visit Florida spent 41.5% of its budget on media. The rest of its budget, minus about 3.6% for administration, goes to marketing programs such as sales, new product development and visitor services, says the agency created by legislators in 1996 as the operating company of the Florida Commission on Tourism, a public-private partnership.
Locally, the head of the Greater Miami Convention & Visitors Bureau said this is an instance of bad timing and flawed economic thinking. Tourism is Florida’s number-one industry and the best bet for getting its economy moving again, said William Talbert III, Visit Florida board member and president/CEO of the Greater Miami bureau.
The loss to state coffers could be significant as well, Mr. Talbert said. "Visitors generate one-third of the gas tax and one-third of sales tax" that goes to Tallahassee from Miami-Dade County. "You get the best return on investment of any expenditure the government has. If the government invests in it, revenues are going to go up."
Mr. Talbert said the convention bureau will keep a strong focus on marketing Miami-Dade as a visitor destination but some punch will be lost without the state as a full partner. "It all goes hand-in-hand," he said.
Mr. Goldman, the Visit Florida chair, said the combination of state and local marketing has been the key to Florida’s visitor attraction strategy. "Those dollars taken together have made the purchases [of media advertising] possible. Take an individual element out and those buys aren’t possible," he said.
Mr. Goldman said he doesn’t see a way to offset the marketing losses. Local visitor marketing agencies such as the Greater Miami bureau, he said, are not seen "as a well to go to."
(Staff writer Risa Polansky contributed to this report.)