Analysis: House tourist development tax plan would cripple Florida’s economy

A measure aimed at repurposing tourist development taxes would have far-reaching negative impacts if passed, an analysis found.

Down & St. Germain Research, a research firm that frequently works with the statewide association serving local tourism marketing groups, Destinations Florida, conducted the analysis. Researchers looked at proposed legislation (HB 7033) that has already cleared the House and is awaiting Senate consideration, if the upper chamber decides to take it up in its final days of an extended Session.

The analysis found that Florida could expect to see a 30% decrease in tourism within two years after passage should the measure clear the Legislature and earn Gov. Ron DeSantis’ support. That reduction would lead to a more than $37 billion economic impact, including $22.5 billion less in wages to Florida workers and $4.54 billion less in state and local tax revenue, as well as the loss of 682,000 jobs statewide.

Those numbers were derived using data from comparable circumstances in which a state with dominant tourism numbers stopped tourism promotion activities. Analysts then applied those findings to current data available from VISIT FLORIDA.

“House Bill 7033 will leave Florida residents saddled with increased costs to fund programs, services and facilities that tourism-generated revenue currently supports,” said Robert Skrob, Executive Director of Destinations Florida.

The most relevant example comes from Colorado, where the state in 1993 zeroed out its tourism marketing budget. A paper by Longwoods International CEO Bill Siegel claimed the state “over time” lost $2 billion in annual revenue as a result. The decline was clear enough that some funding was restored in 2000. By 2006, tourism marketing was further restored with a $19 million budget.

“Colorado once led North America in ski tourism until its lawmakers raided funding for tourism promotion. Within months, competitors like Utah pounced. Colorado lost billions in visitor revenue and took nearly two decades to recover,” Skrob said.

“While we are winning now, Florida risks the same fate. Surrounded by beach destinations eager to lure our visitors, we could soon be watching high-value travelers fly over Florida costing us jobs, tax revenue, and the economic momentum some lawmakers are taking for granted.”

Florida’s current tourism development tax structure was first requested by Florida hoteliers, who volunteered to have taxes levied on their own services in order to establish a dedicated revenue stream to promote tourism and ensure the visitors kept coming.

Since lawmakers approved the taxing structure, Florida has been able to maintain its status as a state income tax-free destination, a perk that’s useful in attracting businesses and residents to the Sunshine State.

According to Destinations Florida, tourism marketing and the robust industry it supports allow Florida households to save on average more than $1,900 a year on state and local taxes, because revenue instead is derived from visitors. Meanwhile, more than 2 million Floridians work in jobs at hotels, restaurants and attractions supported by tourism.

In 2024, Florida welcomed nearly 143 million visitors, generating nearly $128 billion in economic impact. Tourism also supported 2.1 million jobs in 2023.

The House-backed measure, while getting pushback from the tourism industry, was born of a need to lower costs for Florida residents. Lawmakers want to use the bed tax dollars to offset property tax reductions. The measure would also eliminate all 62 of the state’s Tourist Development Councils (TDC), which work to attract visitors in all but five Florida counties. Collectively, the TDCs collect about $1.8 billion in revenue from bed taxes.