South Florida tourism bureaus imperiled as coronavirus slashes hotel tax collections
Bracing for a steep drop in hospitality tax revenue because of the coronavirus crisis, the Greater Miami Convention and Visitors Bureau has made pay and staffing cuts and redirected its promotional efforts to local assistance and recovery programs.
The bureau, which uses hotel and restaurant-tax money to attract tourists and conventions, has furloughed six of its 65 employees and instituted tiered pay cuts ranging from 25 percent at the top executive level to 5 percent for workers at the lower end of the scale, said president and CEO William “Bill” D. Talbert III. The bureau also halted pension contributions.
Meanwhile, the organization has turned its attention to Miami Eats, a program promoting Miami-Dade restaurants offering take-out food during the pandemic that’s based on its popular Miami Spice program. Since its launch on March 22, Miami Eats has grown quickly to include 750 restaurants, Talbert said.
The bureau has also launched a program listing hotels across the county that provide so-called “essential lodging.” An exception to the Miami-Dade County order barring new hotel reservations includes displaced people, first responders, journalists and others using hotel rooms as temporary housing.
Broward Visitors bureau hasn’t made cuts
Its Broward County counterpart, the Greater Fort Lauderdale Convention and Visitors Bureau, said it has not made any cuts. Marketing campaigns are “paused” and spending is “under review” as executives await data on tourism-tax collections due in mid-May, the bureau said. That organization has a $24 million budget and 45 employees.
Talbert and the Greater Miami bureau’s chief operating officer, Rolando Aedo, said cuts were preemptive. The state reports that detail tourism-tax collections won’t come in until about 45 days after the end of March, the month when most hotels and restaurant dining rooms were shut down in response to the spreading virus.
But with hotel occupancy plunging to below 20 percent and restricted to essential lodgers only, they said, it became abundantly clear that tax revenue will fall far short of what was projected when the bureau drew up its $32 million budget for this current fiscal year, even if they can only guesstimate the shortfall at this point. The fiscal year ends in September.
“Based on the hotel situation and the reality restaurants are experiencing, for the balance of fiscal year we’re looking at a dramatic impact on tourism tax collections,” Aedo said. “It’s just really hard to pinpoint. We made the reductions not knowing exactly how far they’re going to go down.”
The Greater Fort Lauderdale bureau said Broward is seeing a similar drop in hotel occupancy, but added that it seemed to level off in the last week of March.
“We won’t know until we see the week five and week six numbers, but this could be a sign that we’ve hit the bottom,” the bureau said in a statement attributed to president and CEO Stacy Ritter. “Next step will be the uptick as travel restrictions are lifted.”
The two bureaus are among scores of so-called “destination marketing organizations” across the country that run publicly funded marketing and publicity campaigns promoting tourism and meetings. Because most are funded through taxes on hotel stays, most are getting hit hard by the shutdown prompted by the pandemic, said Karyl Leigh Barnes, president at Development Counsellors International, a destinations marketing firm.
A survey conducted by the association found that most destination organizations expect budget cuts in the range of 20 percent to 50 percent, reductions that she said could crimp their ability to help local hospitality sectors recover once the pandemic subsides and travel resumes.
Loss of funds could make recovery slower
“The decline in hotel stays brought on by COVID-19 is dramatically impacting both jobs within destination organizations and the marketing funds these destinations will have available when the pandemic subsides,” Leigh Barnes wrote in an email. “This places an even greater burden on destination organizations — since their path to recovery is likely to be much lengthier without such relief. Not only will they have no marketing dollars, they will have less experienced human talent on board to make strategic decisions.”
Visit Florida, the state agency that promotes tourism, is not contemplating furloughs right now, a spokeswoman said. Its four welcome centers have been closed until further notice, and 16 of their staff members are helping the state Department of Economic Opportunity field inquires and calls from business owners and workers.
Visit Florida, which is funded through appropriations by the Legislature and private contributions, had already undergone cuts before the pandemic hit. In 2019, the agency laid off a third of its staff, or 44 employees, after the Legislature slashed the state contribution to $50 million from the $76 million proposed by Gov. Ron DeSantis.
The Greater Miami bureau is now working on extending its local relief campaign, Talbert said. It will be launching Virtual Miami, an online tour of top local sites, and is supporting the United Way of Miami-Dade’s Helping Hands program, among other assistance programs.
The organization is also starting work on a plan for recovery of the hospitality industry, Talbert and Aedo said.
Hotels are shuttered at least until May 1 under government order, but even if that’s extended, tourism officials expect them to open before September. Because they expect travel and tourism to resume gradually, the bureau’s strategy is to first promote stay-cation tourism by locals and then visits from residents of the rest of Florida.
“As soon as those hotels are allowed to open up, our goal is to generate the greatest amount of tourism activity in the shortest possible time,” Aedo said.
The Greater Fort Lauderdale bureau is also now devising a recovery strategy, said JoNell Modys, senior executive for marketing.
“We are also working internally on messaging and strategy for the recovery phase once travel restrictions are lifted,” Modys said in an email.
This story was originally published April 8, 2020 at 2:31 PM.