TOURISM IS BACK! BED TAXES ARE ON TRACK TO EXCEED PRE-COVID NUMBERS

Visitors to John Pennekamp Coral Reef State Park in Key Largo prepare for an afternoon on the water. Tourism is recovering in leaps and bounds in the Florida Keys. CONTRIBUTED/Florida Keys News Bureau

Hoteliers are highlighting two columns on the four-penny tax spreadsheet — 2019, when the Keys was almost fully recovered from Hurricane Irma and the economy was humming along, and 2021. The trend looks really good. Consider: in 2019, Monroe County collected $39.8 million in bed taxes; and, in the first six months of 2021, it has already collected $24.9 million. 

Bed tax collection is one of the best indicators of the Keys tourism-based economy and represents the amount of taxes collected on Keys hotel rooms or vacation rentals that stays local. In a normal year — without a hurricane or a pandemic — The Tourist Development Council uses the funds to advertise the Keys as a vacation destination or finance brick-and-mortar facilities or local event advertising. 

Most are comparing 2021’s monthly numbers to 2019, and completely skipping over the dismal pandemic year of 2020 when tourism ground to a halt. Even when compared against 2019, the Keys’ best year ever for tax collection, the numbers are still up. Way up: As high as 58% in the Lower Keys to a 40% increase in Islamorada for the month of March.

Sean Bacon, director of revenue management for Cheeca Lodge & Spa in Islamorada, said the Florida Keys have always been fortunate to enjoy nearly year-round vacation interest from domestic travelers seeking a Caribbean experience inside the United States. Historically, both market rates and occupancy trend lower during the summer season as the demographic is primarily south Florida drive-in guests.  This summer however, he said destination resorts in the Florida Keys such as Cheeca Lodge & Spa and Tranquility Bay Beachfront Resort are seeing stronger demand. 

“COVID-19 test requirements continue for travelers re-entering the United States following a trip abroad, as well as the Florida Keys being a popular alternative to those who have historically taken a cruise as their annual summer vacation,” he said. “The increase in demand for the Florida Keys together with an increase in demand for destination style resorts is yielding much stronger rates and at higher occupancies than in years past.”

Bacon said this increase in demand is even extending into the historically low season periods of late summer August and September, which carry the burden of school returning to session and being peak hurricane season.

That’s a huge turnaround from this time last year. Then the Keys Weekly Newspaper reported that TDC officials expected a $13 million deficit for 2020. 

“We’re now entering the longest period of no tourism that we’ve ever experienced,” Tourist Development Council director Stacey Mitchell said in May 2020.  

The TDC’s District Advisory Councils (DACs) responded to the pandemic’s effect on tourism by moving money around. For example, in the Middle Keys, the DAC moved money from the capital project fund to the capital resource disaster account. 

Fortunately, the pandemic didn’t have the ruinous effect many feared. Monroe County collected about $32 million in 2020, or $7.8 million less than it did in 2019.

However, local hoteliers and vacation rental owners are keeping a close watch on the cruise industry, surmising that the increase in Keys visitors is due to the complete shutdown of the industry during the pandemic.

After a 15-month shutdown, the first ship set sail from a Florida port on June 20 on a test cruise populated by volunteer employees of the Royal Caribbean cruise line. On June 18, a federal judge sided with the state of Florida, which is pushing for cruise ships to resume sailing, against the Centers for Disease Control, which had issued an order for travelers to avoid all cruise ship travel. The CDC has since stepped back the order and now only “encourages” travelers to get vaccinated before traveling. 

“When you consider the number of passengers aboard a cruise ship, and their ability to sail from Miami, Fort Lauderdale, Palm Beach, Tampa … well, that’s going to affect us when cruise ships resume sailing,” said Michael Weber of the Fairfield Inn & Suites by Marriott in Marathon. “We hope it will only impact us in a small way.”

There’s hope, he said, that the pandemic has brought “new” visitors to the Keys who will come again to enjoy the Fairfield Inn & Suites that was rebranded and renovated in 2020.  

Jodi Weinhofer, president of the Lodging Association of the Florida Keys & Key West, also has watched occupancies and room rates skyrocket in the wake of the pandemic. But, she said, all her member lodging properties and their general managers — “have all been warned, plus they already knew this won’t last,” Weinhofer said, adding that once the Caribbean, Mexico and Europe reopen, and once cruise ships start sailing again throughout the world, the demand for and occupancy of Keys hotels, guesthouses and other accommodations will drop significantly.

FOUR-PENNY REPORT FOR MARCH

Bed taxes are collected on hotel rooms and vacation rentals in the Florida Keys to fund the Tourism Development Council’s efforts to promote the islands as a tourist destination.

District2019 2021% increase
District 1 (Key West)$2,782,351 $3,213,12015.4%
District 2 (Lower Keys)$339,689 $539,62858.8%
District 3 (Middle Keys)$878,995 $1,347,63053.8%
District 4 (Islamorada)$570,213 $802,78640.7%
District 5 (Upper Keys)$888,541 $1,177,61832.5%