Visit Orlando, the local tourism marketing agency, earn millions of hotel taxes to promote the theme park to Taylor Swift fans, and run TV ads between Macy’s Thanksgiving Day Parade and Court International visitors from Canada to Chile.
A pair of Orlando legislators say some of these funds should be spent on more pressing needs, from expanding mass transport to building affordable housing.
Democrats Senators Carlos Guillermo Smith and House Rep. Anna Escamani alleged that Visit Orlando “swallows” public money under current state law. The law has become one of the nation’s most funded tourist market organizations with annual budgets of over $100 million.
To succeed, lawmakers will need to infiltrate Republican-controlled Congress, which shows little desire to shake up the tourist tax. Visitors pay their taxes when they stay in hotels or short-term rentals.
Democrats have introduced several bills to reduce the requirement to use at least 40% of hotel tax revenue to promote and promote tourism. Their approach could free up more than $50 million on other public projects.
Diego Bufquin, professor of hospitality management at Tulane University, said such changes made sense. When Disney, Universal Studios and SeaWorld (the three major theme parks in the region) already have substantial marketing budgets and global reach, many spending to visit Orlando is likely questionable.
“Orlando has become a very expensive city to live in,” said Bufkin, a former professor at the University of Central Florida. “Employees working in the tourism sector need help. They need the help of affordable housing. They need the help of transportation.”
Smith agrees, and the spending mission bolsters corporate marketing budgets with public funds, but rarely addresses the challenges the Orlando area faces as a megatourism destination.
“We can’t afford to connect Sunrail to the airport… we can’t afford to buy the housing infrastructure of our workforce,” he said. “We cannot afford to pay for tourism-related public safety improvements, which is why we introduced these reforms as all our resources are being digged into visiting Orlando.”
Visiting Orlando leaders claim to benefit the community and provide economic returns that expand to all regions of the tourism industry. In addition to promoting the Orlando brand globally, the organization works to attract practices, collect economic data and build community partnerships. According to Visit Orlando, approximately 40% of the group’s members are small and medium-sized businesses.
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Rep. Doug Bankson of R-Apopka said that marketing is the key to thriving the key tourism industry in central Florida.
“We need to use taxes for the purposes that the tax was created,” he said. “Trapping Peter to pay Paul is inconsistent with the purpose of transparency and taxation.”
But reformers say mass transport and affordable housing are related to tourism, and clearing busy roads near attractions and providing a place to live for low-wage service workers will benefit the industry.
Visiting Orlando’s marketing efforts include television ads that aired during the summer Olympics, Macy’s Thanksgiving parade and other major events.
The organization aired $600,000 in commercials during Taylor Swift’s on-demand concert film on the “ERAS” tour, featured on the Disney+ streaming platform. The ad, entitled “Incredibly Real” opened with a family in matching Magic Kingdom shirts, followed by a theme park scene at SeaWorld and Universal Studios. Finished with the number of kayaking.
The tourism development tax, generated by a 6% tax on hotel stays and other short-term rentals, generated approximately $360 million in revenue for the 2023-24 budget year. In addition to tourism promotions, this money will be used for Orange County Convention Centres, sports venues, art and museums.
One of Smith’s bills soften the mandatory spending requirements for promoting tourism to less than $50 million, or about half what they’re currently spending.
He also wants to expand how tourism tax revenue can be spent and add affordable housing projects to his list of eligible uses.
Another Smith bill requires the private sector to visit Orlando Dollar to coincide with the public’s contributions. According to the latest tax returns, membership fees donated about $2.7 million to Visit Orlando, a mere portion of the institution’s $109 million budget.
“They are entirely dependent on taxpayer funds,” Smith said of the organization. “It’s not a public-private partnership. They can rely on the government and taxpayers to do all their work. We don’t really see the profits.”
Eskamani has been pushing for years to reform the tourism tax. She supported Smith’s proposal, and introduced her own bill that completely eliminated the mandatory spending requirements for tourism marketing, providing county commissioners’ authority over money.
“It unlocks their hands,” said Escamani, a 2027 mayoral candidate for Orlando.
Orange County Commissioner Kelly Semrad said he would accept more discretion in how tourism tax taxes are being used.
“We consistently want more money from taxpayers, but we don’t really see all of the existing taxes that come in. We know that tourists are using our infrastructure,” she said.
Orange County officials have proposed a sales tax increase to voters who were violently defeated in 2022. That 1% tax increase would have generated around $600 million a year for transportation needs.
State and local officials are working this year to raise $6 million to study the proposed extension of Sunrail, known as the “Sunshine Corridor.” The estimated $4.4 billion plan will connect Orlando International Airport to the Orange County Convention Center, International Drive and Disney Springs.
Tapping on hotel taxes seems logical, as UCF professor Semrad, who studies tourism, said Orlando’s inadequate transport system hurts residents and tourists who are forced to rent or fight cars while on their trip.
“Having a community impact project that makes a difference in our quality of life is a great opportunity to improve the tourist experience,” she said.
