Economist warns Florida tourism will take years to rebound

Quarantine COVID-19. Ban on visiting beaches. Challenge of the tourism sector

The ongoing pandemic has capsized Florida tourism, a sector responsible for 15% of sales tax collections ($3.8 billion) in 2018-19. The industry was down more than 30% in the 10 months of receipts during the virus crisis.

For the state’s coffers, that presents an existential problem that will not be especially short-term.

From 2000 to 2019, tourism doubled, with more than 130 million visitors two years ago. By Q3 of 2020, tourism somewhat recovered from the height of COVID-19 shutdowns, but was still way down, especially regarding people flying. Air traffic was 34% what it was the year before in the same quarter. And that’s the problem, notes a state economist.

“People who fly into Florida typically spend more money in Florida and stay in Florida longer,” noted Amy Baker of the Office of Economic and Demographic Research.

Per a presentation in the House Tourism, Infrastructure, and Energy Committee, “Florida’s tourism-sensitive economy is particularly vulnerable to the longer-term effects of the pandemic.”

In other words, Florida will be among the last to recover from the national economic dislocation, if previous pandemic cycles are prologue. It can take 15 months for tourism to rebound, and expectations are that the sector may be humming again in 2024.

If that’s the case, it sets Florida on a challenging path in terms of revenue through the 2022 elections and well beyond. Nevada and Hawaii, two tourism centers in their own rights, may have been hit harder. But for Florida, the pandemic impact will be greater than for many places.

In terms of tourism, this is the latest spoke in a cycle of death and rebirth.

Baker noted disruptions had happened before, such as in 2001. Growth after the Great Recession was dramatic, coming after a “flattening out” of tourism at the end of last decade

“It grew very, very strongly at rates we hadn’t seen, all the way through 2019,” Baker said, with growth at 6% a year and overseas and international travel being especially robust.

The recession that started in 2020 predated the pandemic, Baker noted, but the bounce back will be slow, “segmented and scattered through,” with road-trippers coming back. However, less certainty exists about business and foreign travelers in the near term.

While recovery is certain, Baker notes “we’re in a bad place right now.”