Summer 2009 eNews Home

First Quarter Bed Tax Numbers Indicate Tourism Slow-Down
by Melissa Neal, PhD

During first quarter 2009, Northwest Florida saw an 11.97 percent decrease in bed tax collections over the same time period in 2007. This is quite a significant downturn given that bed tax collections during the first quarter of 2008 were up 10.4 percent over the first quarter of 2007. Overall collections for the Northwest Florida region (at a 2 percent rate) were $2.5 million from January 2009-March 2009, down nearly $349,000 for the five county area.

According to Florida Trend Magazine¹ and Smith Travel Research, Florida felt the effects of the economic downturn back in September 2008. Statewide occupancy rates dropped 10.5 percent, and at the same time, hotels and other properties lowered their rates, resulting in a 12.6 percent decrease in the average revenue collected per room. Theme park business in Florida has also slowed over the last two quarters. Across the state, tourism officials are responding to the downturn by reaching out to Florida residents to entice them to travel within the state.

Below is a chart that outlines individual county growth during this time period. The Haas Center tracks bed tax revenues on a monthly basis because they are a valuable indicator of the number of tourists visiting Northwest Florida. Using this data, the Haas Center staff can forecast future levels of tourism in the Northwest Florida area.

The graph shown depicts actual, seasonally adjusted, and forecasted bed taxes for Escambia, Santa Rosa, Okaloosa, Walton, and Bay counties. The seasonally adjusted numbers show the steady increase in bed tax collections over the past several years. Because each county collects bed taxes at different rates, we convert all data to a 2 percent level for analysis purposes. These figures do not represent actual tax revenue collected; however, they are an indicator of the health of the tourism industry in the area.

The graph also includes an estimate of the bed tax figures for the Northwest Florida region through March 2010. These figures were forecasted using a 95 percent confidence level. The forecast lines depict the most probable scenarios for bed taxes within an upper and lower range. In other words, the Haas Center is forecasting that actual bed tax collections could fall anywhere within the upper and lower lines on this graph. As the graph shows, bed tax revenues vary widely depending on the season. Bed taxes historically increase steadily from January to August, and that trend continues through the first quarter of 2009.

Each month, the Haas Center collects, analyzes, and disseminates tourism data which includes detailed statistics of various tourism indicators in Northwest Florida. Information on the five-county region is posted on our tourism website at haas.uwf.edu/tourism.htm. Detailed data on the site includes bed taxes and hotel and restaurant sales for the five-county area. If you would like more information on this or other tourism research projects, please contact Dr. Melissa Neal at (850) 833-9113, or by e-mail.

¹Keller, Amy (2009, January 1). Tourism 2009: Travelers Check: Tourism-related industries are getting aggressive in targeting visitors. Florida Trend.