State tourism spending cut failed; instead, try increasing it
Florida tourism officials this week are in Tallahassee making a case for keeping their state marketing arm alive. Our thriving real estate industry – and others – should be at their side.
The visitor industry needs all the help it can get as it seeks to keep Visit Florida, its marketing arm, safe in the face of attacks by House Speaker Jose Oliva of Miami Lakes.
As a sales professional in private life, Mr. Oliva should well know that advertising and marketing are vital to long-term brand success. Yet he’s bent on shutting down spending to market Florida to visitors. Last year, he was pivotal in cutting Visit Florida’s funds from $76 million to $50 million. Those funds market us to the world.
Mr. Oliva’s belief that Florida should not spend to help businesses prosper is a legitimate (if misguided) theory of government, one that fellow lawmakers should override.
In this case, he’s attacking one of our two statewide industries. The other is real estate. And those two are inextricably joined.
If that isn’t self-evident, look at who rents or buys. There are only two customer pools: those who live here, and those who visit. Since locals already have places to live and work, more spaces require more outsiders.
Both the visitor and real estate worlds explain Florida’s economic growth the same way:
First, visitors vacation, see family or do business, and while they’re here they spend.
Then, some of them rent or buy real estate.
Then, some work here.
Then, some invest here.
Then, some start or expand businesses here, creating new jobs and hiring others.
That’s why realty pros rely on the visitor industry. Both are based on growth from outside.
Outsiders are so vital that the Miami Association of Realtors has signed agreements with an incredible 220 real estate associations around the globe that can funnel buyers here. The livelihoods of the local association’s 52,000 members depend on the growth of visitors to Miami nationally and globally.
The drive by Mr. Oliva to zero out visitor marketing thus strikes directly at real estate too. Indirectly, it harms almost every element of the economy, since spending by tourists and tourism employees reaches every corner of the economy.
We’re talking about 1,276,700 hospitality workers, more than 12% of Florida’s workers. In Miami-Dade alone, 148,600 persons in November worked in hospitality.
That’s a lot of livelihoods to tamper with on Mr. Oliva’s theory – he says it repeatedly – that our visitors all knew about Florida anyhow, so why market to them?
We’d bet that Mr. Oliva’s cigar business regularly puts its brands in front of buyers and tells them the advantages over competitors. If they’re not marketing, they’re leaving lots of money on the table.
Well, the visitor industry is the same. Florida shouldn’t count on people just showing up. Advertising and marketing invite people based on a value proposition.
Mr. Oliva is correct that we needn’t invite some visitors. Business travelers come to do business. Families lure relatives. And former visitors are likely to return again. These people don’t need to be sold.
But the industry has data to show around Tallahasse this week on how many of our visitors arrive because a marketing nudge helped – nudges Mr. Oliva wants to reduce.
Nudges can be extremely valuable, even if they affect only a bit of the market. Back-of-envelope calculations show that even a 1% annual upswing up in tourism totals a gain of more than a million and a quarter visitors with an added economic inflow of $1.4 billion in Florida.
Mr. Oliva is right, of course, that the big tourism hubs do mammoth marketing. Disney wouldn’t be Disney if its parent hadn’t spent well over two-thirds of a century carefully marketing and hyping its brand. Disney doesn’t need Visit Florida.
But most tourism enterprises are smaller. They can’t market to the globe. Visit Florida can, and does.
Last year’s budget slash vastly reduced the agency’s impact, as Florida hotel room nights fell 0.7% in the first three months of the cut. As in recent years, Visit Florida is fighting for its life.
That’s why The Partnership for Florida Tourism, which includes the Florida Attractions Association, Destinations Florida, the Florida Cattlemen’s Association and the Florida Restaurant & Lodging Association, are hosting tourism day with a rally at the Capitol this week to drum up support.
Gov. Ron DeSantis has included in his budget this year $50 million to sustain Visit Florida in its weakened state. A house bill in the legislative session would keep it alive until Oct. 1, 2028.
But the aim shouldn’t be life support. Industry studies show every dollar spent on visitor promotion returns more than that directly to state government, and far more to residents. Both government and residents profit by spending to bring visitors here.
We accept Mr. Oliva’s vocal concerns about the state spending to support individual companies. But it’s hardly corporate welfare to help more than 12% of our workers grow and prosper – particularly when the gains ripple through Florida’s economy.
Mr. Oliva said last year of the cuts, “If we set another tourism record with Visit Florida’s budget cut in half, it begs the question is it necessary at all?”
Well, in the first quarter of a cut of less than half, tourism fell as the nation’s economy soared. That begs the question, does Mr. Oliva’s slash-and-burn policy have any legitimacy at all?
The answer is that his experiment failed as both philosophy and an economic tool.
So, what would happen if instead of a cut we doubled state tourism marketing spending and made sure it was done right? Isn’t that a proven tool for growth?
Every industry in Florida should be supporting that aim. It’s good for them, too.