Proposed law threatens billions in tourism revenue, industry leaders warn

Business Journals

25-04-2025

Tourism leaders are sounding the alarm over a proposed bill that could dramatically alter how visitor taxes are spent, potentially impacting everything from beach maintenance to major sporting events.
On Friday, Florida lawmakers approved House Bill 1221.
The bill calls for completely restructuring how tourist development or bed taxes are spent. Visitors pay these taxes, which hotels or other rental properties collect.
Florida is a tourism state at its core. For decades, Florida has used money collected from tourists to fund billions of dollars' worth of projects across the state. In a matter of weeks, that strategy could be dead, which tourism officials warn could be the beginning of a statewide catastrophe.
Part of the bill eradicates the pathways counties could take when spending the collected taxes. Instead of being spent to promote tourism, the funds would go entirely toward a credit against county residents' property tax bills. It also requires TDTs to expire every eight years, meaning that counties would forever be uncertain whether they will continue to be able to collect the funds.
The bill will soon go to the Florida Senate, and if it receives further approval, it will land on the governor's desk to be signed into law. If counties are now responsible for finding alternative means to fund the assets that have attracted visitors to their area, citizens will more than likely pay the price.
'This is about killing the goose that lays golden eggs for Florida,' Santiago Corrada, president and CEO of Visit Tampa Bay, said.
Will residents feel a tax break?
Florida collected more than $2.9 billion TDT in the past fiscal year, Corrada said. Those funds are not evenly divided among all 67 counties but are distributed to the counties from which they are gathered. Orange County alone generated nearly $793 million, Broward County brought in $142 million and Pinellas County brought in $107 million.
Every other county brought in less than $100 million — Hillsborough brought in $71 million — so the savings will vary across the state. Some smaller county residents would see $5 to $20 credits, while Hillsborough taxpayers would see around $130 in property tax relief.
However, counties with economies primarily based on tourism will face painful choices. They either have to let their assets degrade— stop work to replenish beaches, stop renovations to stadiums and stop competing to host conferences like national conventions or sporting events—or find alternative funds.
Raising the millage rate is one of the few levers governments can pull to generate more funds. Residents could be forced to pay more taxes than they would make back with these savings.
Statewide, the result could be even more ominous, Corrada warned.
If tourism numbers drop, Florida's budget will face unprecedented hurdles. Corrada said one path forward could be to implement a state income tax.
'There are communities and states that don't have state income tax because of their strong visitor economy,"Corrada said. 'If you opened the dictionary and looked up income tax-free states, you would see a picture of Florida. What happens when that's no longer the case?'
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Santiago Corrada, CEO, Visit Tampa Bay.
PEZZ PHOTO
What's at risk?
Visit Tampa Bay numbers show that Hillsborough County has set tourism records over the past three years, with over $1 billion in taxable hotel revenue each year. A large part of its success is the strategic advertising highlighting the county in other parts of the country and across the globe, Corrada said.
TDTs collected in the county could be used for stadium upkeep, including work at Raymond James Stadium and Amalie Arena. Without well-maintained facilities, Tampa Bay would not see Beyoncé or Taylor Swift concerts, a Super Bowl, or an NCAA basketball championship, Corrada said.
Hillsborough invests in airline recruitment to help Tampa International Airport bring new international direct flights. Travel in and out of Tampa Bay could look very different without its strong tourism market. Airlines will also be less keen to support routes out of Tampa Bay if the appetite for tourism in the region slows.
Hillsborough supports 61,326 tourism-based jobs, according to Corrada. Hoteliers, caterers, florists and limo drivers are all at risk.
"There's a lot of gamble in this; there's a lot of risk in this," Corrada said. "I'm surprised that it's so short-sighted and so ill-fated. If this damage happens, I hope people will remember. I hope they won't have short memories and they'll remember exactly how this happened."
Beaches especially vulnerable
In Pinellas, losing TDT would spell devastation.
After Hurricanes Helene and Milton caused widespread devastation in Pinellas County — eradicating roughly 1 million cubic yards of sand from its beaches — the county created a plan to restore its waterfront using TDT.
The plan calls for spending $102 million on beach renourishment in fiscal year 2026 and $144 million in fiscal year 2032, with less than $1 million set aside for each year. The county has also expressed hope for federal assistance. Without pristine beaches, tourism will suffer, and the county's economy will face a rocky future.
Some argue that Florida will always attract tourists. However, other states that made similar gambles lost.
By the 1990s, Colorado had become a premier destination, drawing billions in tourism revenue annually. In 1993, the state eliminated its tourism marketing function, which cost roughly $12 million a year. Within two years, its domestic market plunged 30%, losing more than $1.4 billion in tourism revenue annually.
As time passed, that number climbed to an average of more than $2 billion a year as visitors went to Utah, Montana, and other neighboring states instead.
'Florida does not have a monopoly on tourists,' Corrada said. 'Look at what happened during Covid, what happens during hurricanes or economic recessions and depressions, and what happened during 9/11. No one has a monopoly on visitors. If you want to keep that edge and be the number one state for tourists, there's a reason that happens. It's because of marketing.'