All eyes are on Florida Governor Rick Scott as he decides whether or not to veto a bill passed in the legislature earlier this month that would cut the Visit Florida budget by 67 percent. If the governor withholds his pen, the destination marketing organization’s budget will be slashed from $76 million to $25 million, which could deliver a severe blow to tourism in the country’s most visited state.
It’s not just family vacation dollars at stake. Florida is a top-tier meetings destination, and meeting attendees spend almost double the average tourist. According to Visit Florida, 6 percent of domestic visitors are in the state for meetings, seminars, or conventions, and they spend an average of $277 per person per day compared to the average visitor spending of $156.40.
The industry brings in huge revenues for the state and is a major job generator, particularly in the No. 1 meetings destination in the country, Orlando. Just one venue alone, the Orange County Convention Center (the second largest venue in the U.S.) hosts more than 230 events annually, attracting roughly 1.4 million attendees, all of whom contribute $2.4 billion to the local economy, according to event giant Cvent.
How the budget cuts might affect meetings and event business in the state generally, and Orlando, in particular, remains to be seen, and there is no consensus in how various players perceive the possible impact.
When contacted by Skift for comment, Visit Florida’s office of communications forwarded an email from Ken Lawson, president and CEO of Visit Florida, to Florida Senate President Joe Negron and House Speaker Richard Corcoran. In the May 2nd missive, Lawson warned that the proposed budget could “kill jobs and cripple Florida’s economy.” His email went on to cite research from the Florida Office of Economic and Demographic Research predicting the state would lose $163.2 million in tax revenue.
Meanwhile, George Aguel, president and CEO for Visit Orlando, told Skift, “While Visit Orlando is the only organization that focuses on selling and marketing the Orlando destination to the meetings and convention industry, the statewide tourism marketing efforts by Visit Florida ensures Florida remains competitive as a global travel destination, particularly as we compete with other destinations not just in the U.S., but also with other countries”.
One leading industry insider predicts that the budget cuts will have a negligible impact. Mike Graves, COO of metroConnections – a Minneapolis-based company that provides conference, event, stage production and transportation services for meeting and event planners – believes that there are too many existing intangible assets that will always lure large events to Florida, regardless of the state’s marketing efforts. He added that Florida is more insulated from a budget cut than second-tier cities such as San Antonio, Nashville, or Phoenix.
In an email exchange, Graves said state tourism DMOs have very little influence on how he chooses an event location, “unless they’re offering large tangible incentives or cash rebates to help attract the client/program.”
Graves added, “Experienced conference planners already understand the advantages/disadvantages of any tier-one level city or location. Oftentimes, we see tourism organizations spending more on attracting consumer/vacation travelers, than on attracting meetings and events.”
That’s not the case in Sarasota, according to Virginia Haley, president of Visit Sarasota County. Because her city lacks a convention center, and all meetings are booked in hotels, Haley said the budget cuts could hit Sarasota harder than larger markets, such as Orlando, that are serviced by convention center DMOs with “massive” sales teams.
“We only have three sales people,” said Haley. “Our $7 million budget primarily goes to leisure. Our tourism segment brings in approximately $1 billion annually in direct spending. Meetings and conventions represent about 10 percent of total business, and 15 to 20 percent of our marketing budget. That doesn’t go very far. We really rely on Visit Florida for the events they put on in key markets for our meetings business.”
Visit Sarasota currently allocates roughly 30 percent of its budget to Visit Florida programs, including the annual outreach in Atlanta.
“We can buy into that program,” explained Haley, “they have a greater reach into that market and I can’t match that. If we have to do it on our own, it will limit our reach.”
Haley said the budget cuts couldn’t come at a worse time for her city, as a thousand new hotel rooms are opening over the next 18 months, bringing Sarasota’s room total to 3,000, and creating what she called enormous pressure to create demand.
When asked about a contingency plan, Haley said that her office is assuming the budget cut will go through and is planning their marketing accordingly.
“We’re stripping out the extras. We’re going to stick to the tried and true, meaning primarily our key domestic markets in New England, Chicago, and the Midwest. We’re not going to try to expand our international reach beyond Canada, the UK, and Germany. It’s across the board, but with meetings, we had been doing exploratory work to open people’s eyes to Sarasota as a meeting destination. Now we’ll have to go back to those things that absolutely generate firm leads. The brand building takes a little bit of a back seat.”
Florida Governor Scott lobbied hard for Visit Florida’s budget to be increased to $100 million, and is said to be furious at Republicans in the legislature for ignoring his recommendation on that issue. In response, he may veto the entire budget, and there are conflicting reports regarding whether there are enough votes to override. Scott could also use line-item vetoes for parts of the budget he disagrees with, including the Visit Florida allocation. Once the budget lands on his desk, he has 15 days to make his decision; the state’s fiscal year ends on June 30th.