Don't slay tourism's golden goose to dine once, then starve
By Michael Lewis
One of the worst ideas ever to win Miami-Dade County Commission unanimous approval was to divert visitor promotion taxes to infrastructure.
The visitor industry was a pillar in the recession. While our economy shed jobs, the visitor sector merely dipped, then grew.
So why did nine commissioners last month urge the state to strip our visitor-building tax for what could be toilets and roads? They argued that we need infrastructure and must
Fair enough, and true.
But don't kill the goose laying golden job eggs to eat a goose dinner that will soon leave us economically starving.
State law now lets each county levy up to 2% on hotel bills to promote tourism. In Miami-Dade, the tax is on the mainland, with 60% for visitor development, 20% for culture and 20% for our baseball stadium.
The resolution urged the state to allow counties to use tourist development tax receipts for any tourist-related infrastructure, implying that anything could be tourist related in a state that relies on visitors.
Fortunately, no legislator has filed such a bill. A sponsor cited to commissioners, Sen. Rene Garcia, filed six bills Saturday but none dealt with the tax Ð and insiders say Mr. Garcia has dumped this bad idea.
How bad is it?
Florida's hospitality industry employed 988,400 workers at its pre-recession high in November 2007. The total fell to 916,600 in January 2010, but by December 2012 Ð the most recent US Bureau of Labor Statistics figure Ð it had soared to 988,500, a record high.
In a job slowdown, an all-time
high isn't where you pull the plug on
Here at home, in Miami-Dade in March 2008 the industry employed a record 108,400 people, one of every nine Florida tourism jobs. That dipped to 101,100 by August 2009 before soaring to a record 116,500 last March, our peak visitor month.
These aren't jobs to play with in a jobless recovery.
Miami Beach is set to upgrade its convention center to lure visitors who would add jobs in hotels, restaurants, stores and more. But meeting promotion relies heavily on the very tax that commissioners would raid.
Conventions and meetings reserve years ahead. If we trim promotion, an upgraded convention center becomes a waste.
We reported last week that 16 new hotels are to open in Miami-Dade this year. The owners are building as visitors and room revenues rise. Cut promotion and guess what? Growth slows or stops.
Admittedly, not all visitor growth stems from the Greater Miami Convention & Visitors Bureau, the county's tax recipient. Nor is the bureau vital in booking every meeting or convention.
No, the visitor industry wouldn't die with less tax-funded marketing and promotion. People would still come to Miami. Those on business would still visit. Meetings would continue.
But reduced marketing would cut visitor totals measurably. The sector would support far fewer jobs, fill far fewer hotel rooms, produce far fewer shoppers in malls.
Miami-Dade has advantages in luring visitors, but cost isn't among them. We tax them more than Broward, for example, and room rates here are far higher.
We fill those rooms by luring bigger spenders who pay more Ð in January we had the nation's highest daily hotel room rate Ð and promotion helps do that. Our hotel rooms were 82.5% filled, second in the nation.
Think of the business adage: you can spend less by cutting advertising, but can you afford the loss of income that follows?
In a ticklish economy, don't weaken our big growth sector.
Moreover, this tax generates more than outside business. Greater Miami Convention & Visitors Bureau month-long events lure local residents to attractions and restaurants.
But outside visitors create our big shot in the wallet, and only demand drives high rates and high occupancy. As we add hotel rooms, we must ratchet up demand to stay on top, not ease it back.
No commissioner will ever admit to being anti-visitor, but the vote to raid the visitor development cookie jar definitely was.
No state legislator has picked up this issue. None should Ð if you doubt that, consider nearly 1 million jobs in Florida.
Raiding visitor development funds across the state would be a misguided raid on Florida's economy. We need infrastructure, but undermining tourism isn't the road to get it.
To read the rest of this Miami Today issue GO TO e-MIAMI TODAY, an exact replica of the printed edition.