Hotel tax collections set one-year record, but show signs of softening in recent months
Dave Berman, Florida Today
4 min read
A strong winter and spring powered the Space Coast to a record-setting year for tourism. But there have been signs of softening in the tourism sector in recent months, putting some doubts in the future of one of Brevard County's most prominent industries.
Recently released data on Brevard County tourist development tax collections ― a widely watched indicator of the strength of the tourism industry ― shows that the tax raised a record $25.54 million for the county in the 2022-23 budget year that ended Sept. 30. That's up 9.5% from the previous record of $23.33 million, set a year earlier.
The 5% tourist tax is collected on hotel rooms, vacation rentals and other short-term rentals. The $25.54 million collected indicates that those entities generated $510.8 million in revenue on their rentals in 2022-23.
People on the beach in Cape Canaveral watch a recent launch of a United Launch Alliance Atlas V rocket. Rocket launches are one of the attractors of tourists to the Space Coast.
Those figures don't include sales revenue at restaurants, retailers and attractions, which do not collect the tourist development tax.
Tourist tax collections for each of the first seven months of the 2022-23 budget year, starting in October 2022, exceeded previous-year figures. But collections fell short of previous-year numbers in May, July, August and September, including a 9.9% decrease in September, the last month for which the data is available.
"As we enter the new fiscal year, it will be interesting to see if we continue to soften, compared to the prior year, or see some strengthening as we go into 2024," Space Coast Office of Tourism Executive Director Peter Cranis said. “Despite seeing a slowdown during third quarter, we still achieved the highest tourist development tax in history."
The tourist tax is used to pay for the Office of Tourism operations, including marketing the Space Coast to tourists. It also pays the local cost of beach renourishment, as well as funding grants for tourism-related capital projects and events that bring large numbers of visitors to the county.
“While we think we may see some continued softness this fall, compared to the prior year, there is still a lot of time in the year to make up for any shortfalls," Cranis said.
Royal Caribbean International’s Allure of the Seas, one of the world's largest cruise ships, joined the Port Canaveral lineup of home-ported ships in October.
Cranis noted that, last year, the October-through-December quarter represented only 21% of total tourist tax revenue for the budget year.
In contrast, the January-through-March quarter represented 32% of revenue and April-through-June quarter represented 26% of revenue, indicating that the winter and spring are more crucial to Space Coast tourism than the autumn is.
Among the factors that have boosted local tourism this year are a record number of rocket launches and a record number of passengers taking cruises out of Port Canaveral. Many cruise passengers stay in the area for one or more days before or after their cruises.
Weekly hotel room occupancy rates in Brevard County during the first part of the 2022-23 budget year exceeded previous-year figures, but started to tail off later in the budget year, data from the hotel-tracking company STR show. Higher average daily room rates helped boost the overall tax collection figures.
Brevard Zoo Chief Executive Officer Keith Winsten said he believes the recent downturn in tourist tax collections in Brevard may be the result of unusually hot weather this summer, as well as the increased opening up of tourist destinations in other states, following restrictions that were in place in some states during the height of the COVID-19 pandemic.
"People are looking to do something different" when vacationing, said Winsten, who also is a member of the Brevard County Tourist Development Council and chair of its Marketing Committee.
Winsten said attendance at the zoo ― where about 45% of the visitors are from outside Brevard County ― is showing a similar trend, with a downturn in recent months after a strong start to the year.
"The faucet just turned off," Winsten said.
Drilling down into the tourist tax data, hotels and motels accounted for 65.78% of the tax revenue in the 2022-23 budget year, compared with 32.81% for various types of vacation rentals, including condos. The other 1.41% was generated by recreational-vehicle parks and campgrounds.
Tax collections ― and thus revenue ― at vacation rentals rose 12.2% from 2021-22 to 2022-23, compared with an 8.1% increase at hotels and motels.
Among hotels and motels, properties in Cocoa Beach generated the most tourist tax revenue in 2022-23 ($5.12 million). That was followed by Cape Canaveral ($3.51 million), Melbourne ($3.29 million), Titusville ($1.64 million), West Melbourne ($1.53 million), the Melbourne Beach area ($1.48 million), Viera ($767,076), Palm Bay ($757,027) and the Cocoa/Merritt Island/Rockledge area ($562,385).
The county does not break down geographic data for tourist tax collections by vacation rentals.
