Destination marketing organizations (DMOs) and tourist development councils (TDCs) are keeping their eyes peeled on two bills that recently passed the Florida House of Representatives and have made their way to the Senate.
House Bill 1221 affects how tourist development tax (TDT) revenues can be used, reallocating proceeds to property tax credits and eliminating the current funding levels for tourism-related activities – including tourist development councils.
It is followed by House Bill 7033, which expands the permissible uses of TDT revenues and removes the mandate that a specific portion of those be spent on tourism promotion.
What’s the impact?
The impact this will have on how Florida’s TDCs and DMOs operate – as well as on states that could follow suit – is significant. Passing of the bills will lead to a substantial reduction in funding for TDCs and allow for counties to redirect TDT revenues to other local needs. It will likely hinder marketing and promotional efforts that the organizations currently undertake to attract visitors, which in turn impacts the tourism industry’s contribution to the state economy.
The provisions could reportedly go into effect this year, which does not give the TDCs a long runway before the reallocation of revenue begins.
What’s a tourism organization to do?
It is more critical than ever for DMOs and TDCs to clearly demonstrate the economic impact of their activities on the communities they serve. In other words, what is the RODMO (“return on DMO”)?
Can the organization draw a clear line between promoting the destination and putting heads in beds, increasing visitation and visitor spend, job creation and tax revenue? This clear line could mean the difference in funding critical efforts to drive tourism or losing visitors to neighboring, more well-funded destinations.
Regardless of the outcome of the legislation, the stage has been set for a shift in how tourist development councils and DMOs need to be targeting visitors. With (potentially) less money to spend and greater scrutiny of how resources are allocated, it’s time to move from a reactive marketing strategy to a predictive one.
Just as the name implies, a predictive strategy leverages both visitor data and external factors to determine, i.e., predict, things like visitation, taxable revenue and occupancy rates. It’s a complex approach, but it’s achievable. And with marketing and promotional dollars at a premium, there is a critical need right now for smart possibilities.
With the structure of funding for tourism organizations in flux, at least in Florida, it’s time to figure out how to outthink, not outspend, the competition.
We are currently working with our hospitality partners to turn this market disruption into a competitive advantage. If you need help navigating what’s next, let’s discuss the possibilities.
