Tourist Development Council expects slower gains

Because money is being diverted to pay for capital projects, there is less available money to market Sarasota County

By Brynn Mechem
| 12:00 p.m. January 23, 2020

As the county funds more large scale projects, less funds are being allocated to tourism promotion.

Sarasota
News

Although Sarasota County tourism numbers continue to grow, leaders say diversion of money from promotion to capital costs will cut into that progress.

In a Jan. 15 county commission meeting, Tourist Development Council and Visit Sarasota leaders told commissioners that fiscal year 2019 proved a successful one for tourist development, with tourist-tax revenues totalling $23.5 million, a 2.6% increase over fiscal year 2018. However, leaders predict growth numbers will begin to fall as tax revenues from hotel room stays are shifted away from advertising and promotion uses.

With money directed to new projects in recent years, such as a spring training stadium for the Atlanta Braves in North Port and a $20 million commitment to Mote Marine Laboratory and Aquarium’s project in Nathan Benderson Park, Virginia Haley, the CEO and president of Visit Sarasota, said her agency’s budget has shifted to cover project costs.

From 2015 to 2016, the TDC reported 5.2% growth, which has now dropped to 2.6% growth from 2018 to 2019.

“I think we’re going to see these lower numbers for the [tourist-development tax] for the next couple years as we deal with somewhat reduced budgets at a time of inventory growth,” Haley told county commissioners.

Although Haley said new projects coming to the area will benefit tourism development, the promotion-budget cuts will take a toll.

Commissioner Christian Ziegler questioned whether promotion of Sarasota during an economic downturn is important or if the county could back off promotion dollars in such a time to put toward future projects.

“People are not going to come without the promotion,” Haley said. “If you back off, your competition has an opening.”

The county reallocated money slated for capital projects and tourism promotion to pay for the Atlanta Braves spring training facility in North Port.

History of tourist tax-funded projects

Atlanta Braves Stadium

In February 2017, the county agreed to contribute a $22.1 million bond using hotel tax money to help build the Atlanta Braves spring training facility in North Port. The Tourist Development Council approved a plan to reallocate more than $800,000 slated for capital projects and events and $400,000 budgeted for promotion toward the stadium annually.

Ed Smith Stadium

In October 2018, the county commission approved a shift of money from its promotion budget to make improvements to Ed Smith Stadium. The county anticipated it would need to pay for $16.5 million in improvements over 10 years. However, staff estimated it would only reduce promotional allocations twice. In fiscal year 2020, staff estimated it would need to divert $945,252 and $812,710 in 2022.

Red Tide

In 2018, Sarasota was hit by a large red tide bloom that caused many tourists to shy away from the Gulf Coast. To combat this, Visit Sarasota County had to dedicate a larger than normal amount of funds to marketing in traditional markets, rather than going after new markets. For example, the group targeted tourists from the Midwest rather than an international market and dedicated about $700,000 to airline marketing, up from its traditional $250,000.

Mote Aquarium

In January the county commission voted to dedicate $20 million to Mote Marine Laboratory and Aquarium for work on its new aquarium. To do so, it would divert money budgeted for tourism promotion. Staff estimated the county would have to make annual payments of $1.1 million on a 30-year bond.

Ziegler questioned whether Florida sells itself.

“Absolutely not because consumers have so many choices now,” Haley said. “It’s so easy to get everywhere in the world, and what we have to fight as a state is a ‘Been there, done that’ mentality.”

Red tide also was a contributing factor in the smaller growth in 2019. Haley said tourism leaders placed extra focus on winter tourists to help local businesses recover.

“It was a risky strategy, but we knew that our businesses depend on that season,” Haley said. “It’s 60-65% of their business. We had to endure a bit of a slower summer because of that decision, but we kept our people in business. We kept them strong.”

Commissioners Al Maio and Mike Moran questioned whether reserve funds are being put aside in the event of another environmental emergency or large project.

Haley said that although there are emergency funds built into each TDC fund, such as promotion, arts and entertainment, and beach maintenance, there is not an overall reserve fund.

For example, when funds were originally allocated to the airport, $250,000 was set aside. However, as needs changed, the budget was shifted to allocate nearly $500,000.

Haley said if more revenue is diverted to capital projects, Visit Sarasota has less to use to attract events and tourists to the county.

“As we’re making these really tough decisions, we have to ask ourselves, ‘Will we be limiting future opportunities?’” Haley said. “Right now, we have the ability to plan for them.”