Third-quarter numbers not so sunny in Sunshine State

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The number of visitors to Florida fell by 516,000 in the third quarter, raising fears that the Sunshine State will register its first year-over-year decrease in tourists since 2001, when the 9/11 attacks sent tourism worldwide into free fall.

State tourism marketing organization Visit Florida said that some 20.7 million visitors came to Florida during July, August and September, down 2.4% from 21.2 million in the third quarter of 2005.

Through the third quarter, the total number of visitors was 66.8 million, down 0.8% from 67.4 million during the same period in 2005.

By comparison, statewide tourism grew nearly 5% for all of 2005 to a record 83.6 million, after a 7% increase in 2004.

Various sources in Florida attribute the downturn to fears of a strong hurricane season (which failed to materialize), increased competition from domestic and foreign destinations, and a state tourism marketing budget that can't compare with what other destinations spend to attract visitors.

Any decrease in tourism is big news in Florida because the state's economy depends so heavily on visitor spending. Last year, tourism provided $3.7 billion in sales tax revenue and supported close to 1 million jobs. Overall, tourism is a $62 billion industry in Florida.

Visit Florida spokeswoman Vanessa Welter said increased competition from other markets and the lingering memory of two destructive hurricane seasons are primarily to blame for the tourism slide. The third quarter runs from July to September, which is prime hurricane season.

Short on advertising cash

According to Welter, Visit Florida's tourism advertising budget is flat, and the cost of advertising is rising. She said Florida lags behind Hawaii, California, Illinois, Pennsylvania, Texas and even West Virginia for public funding to tourism.

Welter said Visit Florida, stung by the third-quarter results, is embarking on an "educational campaign" designed to more than double the agency's public funding from the current $24.6 million. Visit Florida's tourism advertising budget is $10.8 million, a "paltry figure" compared with what destinations such as Las Vegas spend, Welter said.

The educational campaign is officially being called "Florida's Tourism Counts," but Welter said the agency isn't prepared to discuss its plans to increase public funding.

Visit Florida's regular source of funds is a 15.75% share of the $2 surcharge on car rentals. Cooperative advertising makes up the remainder of the budget.

Welter said Florida has to worry not only about domestic markets that are spending more on tourism promotion but also about foreign destinations that are going after Florida's major feeder markets.

"Australia, for example, is spending some $180 million during the next three years in the U.K. to attract visitors from there," Welter said. By comparison, Visit Florida spent $1.5 million last year in the U.K., which is a major international market for the state, Welter said.

According to statistics compiled by Visit Florida, repeat visitors, who have traditionally been a solid segment for Florida, are taking more time in between visits to the state, a factor Welter attributed to a lack of advertising.

A look around the state shows that although some destinations are experiencing a slump in arrivals, others are actually up.

On the down side, Orlando, home to king-size theme parks Disney World, SeaWorld and Universal Studios, is experiencing a decline in visitors.

According to Smith Travel Research, which tracks hotel occupancy, Orlando recorded double-digit declines in hotel occupancy in September and October, whereas the average cost for a room there rose 9% to just over $100 a night.

Miami rising

But one Florida destination that is bucking the downward trend is Miami, which saw visitor numbers rise by 2.8% in the third quarter to 2.4 million visitors, according to the Greater Miami Convention & Visitors Bureau.

For all of surrounding Miami-Dade County, the increase included a 3.8% jump in international arrivals and a 1.9% rise in domestic travelers.

For the entire nine months, Miami-area visitor numbers totaled 8.6 million, up 2.8% year over year, with domestic and international visitors registering increases. Hotel occupancy in Miami was up 4% in October, according to Smith.

Despite the downturn through the third quarter, tourism officials said that 2006 could still outperform last year. This is possible because much of South Florida's tourism industry ground to a halt in 2005 following Hurricane Wilma's visit in October.

Last year, Florida welcomed 16.2 million tourists from October to December. Welter said it is too soon to predict this year's fourth-quarter results.

To contact reporter Jorge Sidron, send e-mail to [email protected].

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