Local hotel revenue tops $1 billion

Pinellas County hotels generated $1.1 billion in revenue throughout the past fiscal year – a $30 million increase over 2022 – providing a record-setting $98 million in local bed taxes.

Despite the historic windfall, tourism officials are exploring converting marketing efforts to a public-private model. Visit St. Pete/Clearwater (VSPC) CEO Brian Lowack announced both developments at the Nov. 15 Tourist Development Council (TDC) meeting.

The fiscal year (FY) 2023 began Oct. 1, 2022, and ended Sept. 30. Local accommodation revenue jumped to $1.6 billion when counting motel, RV and online vacation rentals.

“St. Pete/Clearwater continues to show why it is internationally renowned and a top destination for travelers seeking our award-winning beaches and exploring the many other unique experiences found within Pinellas County,” said Lowack in a prepared statement. “I’m proud of the work of our entire Visit St. Pete Clearwater team, the Tourist Development Council, the Board of County Commissioners and – most importantly – our community partners to grow our brand and take the destination to new heights.”

From left: WWE “Superstar” Natalya Neidhart; Brian Lowack, president of Visit St. Pete-Clearwater; County Commissioner Chris Latvala; WWE “Superstar” Osmos; and Brian Auld, president of the Tampa Bay Rays. Photo: Facebook.

The area’s tourism industry has significantly exceeded pre-pandemic levels. Lowack noted that $1.1 billion in hotel revenue represents a $200 million increase over FY 2019.

The bed, or tourist development, tax is a 6% surcharge on all accommodation rentals. County officials dedicate 60% of the funding to destination marketing and 40% to capital projects that will increase visitation.

The $98 million in bed taxes collected reflects a $3 million increase over FY 2022. Commissioners recently dedicated $25.16 million to support the Dali Museum’s proposed $68 million expansion and plan to contribute $312.5 million to a new, $1.3 billion Tampa Bay Rays ballpark.

Commission and TDC Chair Janet Long noted bed taxes also fund extensive beach renourishment projects and ongoing emergency dune restoration efforts. “The tourist development tax plays a vital part in our county as we identify the most optimum ways to reinvest these funds into enhancements … to fuel additional economic growth and help keep property taxes lower throughout the county,” she said.

“We continue to see investment throughout our county with new hotels, dining options and entertainment,” Long added. “With Brian’s (Lowack) leadership and an energized TDC, we will look for opportunities to continue this upward trajectory for the tourism industry in Pinellas County.”

A public-private model

Enlisting the private sector’s help to bolster marketing efforts is one potential opportunity. The Visit St. Pete/Clearwater Area Convention and Visitors Bureau currently operates as a department of Pinellas County government.

However, Hillsborough County utilizes Visit Tampa Bay, a nonprofit organization, for its marketing efforts. Several TDC members agreed that Lowack should explore a similar approach.

“Any organization has room for improvement,” said Belleair Beach Mayor Dave Gattis. “What we’re doing is awesome, but there’s always a possibility that it could be better.”

Lowack provided a “high-level overview” at the Nov. 15 meeting. Commissioners established the TDC and bed tax in 1978, and Discover Florida Suncoast (DFS) – a nonprofit formed in 1981 – once handled sales and marketing operations.

County officials dissolved DFS in 1998 when the VSPC became a government entity. Lowack said many similar agencies are now moving to a public-private model.

“Because everyone else is doing it is not a reason why I would want to do something with our organization,” he added. “Having said that … another reason is enhanced collaboration.”

Lowack explained that other potential benefits include increased funding opportunities and employee wages. He pledged to explore a transition but expressed confidence in the current model.

VSPC’s former CEO abruptly resigned in June amid several vice president-level vacancies. Lowack noted that some positions remain unfilled.

“Are there candidates that won’t come here because of what we pay?” Lowack asked. “The answer to that is ‘yes.’ I will tell you that’s completely fine. We have one of the best destinations in the world in terms of quality of life … this is an extremely attractive place to work.”

Long noted Visit Florida CEO Dana Young encouraged her to explore a public-private model during a recent trip to London. Long said the TDC has “a responsibility to at least be educated about it.”

“I want to see what this organization looks like at full strength,” said St. Petersburg City Councilmember Copley Gerdes. “I want to know what that looks like before we were to make a change.”