Carlos Guillermo Smith wants to shake up Orange County’s lucrative hotel tax

TALLAHASSEE, FLA. 11/30/21-Rep. Carlos Guillermo Smith, D-Orlando, asks a question during the House Health Care Appropriations Subcommittee, Tuesday at the Capitol in Tallahassee. COLIN HACKLEY PHOTO

Sen. Carlos Guillermo Smith wants major changes in how Orange County’s tourist development tax (TDT) is spent.

Smith introduced a package of TDT bills that could potentially cut Visit Orlando’s funding and free up the TDT to be spent on public safety, transit and affordable housing — a move some local officials have been pushing for and hospitality leaders are fiercely against.

“It’s time to modernize the way we think about Tourist Development Taxes,” the Orlando Democrat said in a statement.

The millions of people visiting Disney World and Orlando’s tourism attractions every year helps make Orange County’s hotel tax a lucrative pot of money.

The 6% surcharge on all short-term rentals and hotel stays brought in $364 million in 2024. But to the frustration of some elected officials, that money can’t be spent to fix Orlando’s problems that stem from being a mega-tourist destination.

“While we’re proud to be the nation’s top tourism destination, adding another one million people daily to our 2.5 million residents strains local resources,” said Eric Gray, who was a member of a recent county taskforce exploring the TDT spending, in a statement. “Tourists use water, roads, and sewer systems, generate trash, visit hospitals, and sometimes commit crimes. Hotel taxes in other U.S. cities help address these impacts and promote tourism. These taxes should benefit the whole community, not just one industry.”

Instead, more than $100 million goes to Visit Orlando to promote Disney World and other destinations as well as pay for projects, including the Orange County Convention Center and Camping World Stadium. For instance, Visit Orlando paid $600,000 to air an Orlando commercial heavily featuring Disney World that ran during the Taylor Swift concert on the Disney-owned streaming service last year.

Critics of the current system argue Disney World should pay for its own ads instead of getting taxpayer-funded commercials. Proponents say the advertising encouraged visitors to return to Florida after hurricanes or in the pandemic recovery, keeping the state’s tourism on track.

Current Florida law requires at least 40% of hotel tax collections to be spent on tourism promotion.

Under one of Smith’s bills (SB 1114), Smith said Orange County would no longer be required to spend 40% of total TDT collections on marketing. The proposed new rule would require the county to pay a minimum of $50 million although county officials could decide to pay more if they wanted.

“This simple change to state statute creates an additional funding source to connect the SunRail train to the Orlando International Airport and can help Central Florida realize its full tourism potential all without raising taxes a single penny,” Smith said.

SB 1116 would allow TDT money to be spent on public safety and affordable housing or workforce housing.

“Tourism is a cornerstone of Florida’s economy, and we must ensure that taxpayer-funded TDT dollars are working efficiently to address tourism-related community needs like workforce housing and public safety,” Smith said Tuesday. “This bill gives local governments the flexibility to address those community needs while continuing to support our tourism industry.”

SB 1110 would require Visit Orlando and similar organizations to have a one-to-one match of all private to public contributions. The proposed change would apply to all county marketing organizations with annual operating budgets at least $5 million.

“Requiring the private sector to have skin in the game when it comes to publicly funded tourism marketing, ensures marketing strategies truly align with industry needs and a better rate-of-return for taxpayers. It’s just common sense,” Smith said in a statement.

Under Smith’s proposal, if Visit Orlando failed to meet one-to-one matches by June 30 of each fiscal year, all unmatched public money would return to Orange County’s coffers. 

Florida Politics reached out to Visit Orlando and the Central Florida Hospitality and Lodging Association, but they did not immediately respond to a request for comment Tuesday.

This story was updated to provide additional clarification about Smith’s legislation and attributed a quote to Eric Gray.