Across the country and around the globe, very few can boast living within just miles of world-famous attractions, parks, resorts, dining and more. Not to mention a bustling downtown and world-class sports and arts venues to boot. Who says Orlando is to be enjoyed by its visitors alone?
While the novelty of living in close proximity to these spaces and places may fade for residents over time, it’s important to remember how Orlando’s quality of life continues to shine, and how visitors play a critical role in continuing its legacy of being a world-class destination and residence, envied by the world over.
The Impact of Tourist Development Tax
In 2013, 59 million visitors flocked to Orlando to experience its fun and sun, generating $57 billion in economic impact at its parks, attractions, restaurants, resorts and more. Unique to Florida is the Tourist Development Tax (TDT), which Orange County implemented in1978, a year after the Legislature enacted the law.
Since then, $3 billion in TDT has been collected and is generated when a visitor purchases accommodations at a short-term rental business, such as a hotel or motel. In Orange County, the current TDT rate is 6 percent on the dollar of each room rate.
TDT was created in part by the hospitality industry as a way to increase visitation by creating a source to market and promote a destination to leisure and convention travelers, as well as to help pay for the debt from Orange County Convention Center construction. This past year, the amount collected grew to more than $207 million.
Several local projects over the last decade were the result of funding from the TDT. This includes The Amway Center, Dr. Phillips Center for the Performing Arts and renovations to the Citrus Bowl. In addition, TDT will be used to help finance
construction of the new home of Orlando City Soccer for its 2016 MLS season.
For Orange County sales tax, visitor spending generated $1.9 billion in state taxes and $2.5 billion in local taxes in 2013, with the tourism industry as a whole generating $8.2 billion in federal, state and local taxes and fees.
Following theme parks, visitors rank shopping as the second most popular and appealing activity in Orlando. The destination has two of the largest outlet shopping malls in the U.S., and is also home to the Mall at Millenia. According to Forbes, the Mall at Millenia is the No. 7 highest sales generating mall in the U.S, with Orlando Premium Outlets at No. 8. Much of this impact comes from domestic and international visitors purchasing high-end items to bring back with them when they return home.
While tourism makes Orlando a great place to live and play, it also creates and sustains jobs in the region, with the ratio of visitors to tourism employees at 150:1. With 59 million visitors in 2013, the tourism industry is a vital asset for producing jobs. In Orlando, one in three jobs are supported by the tourism industry alone, and of those, the annual wages amount to a staggering $15.5 billion.
Tourism ensures Orlando having a top-notch scene of entertainment, sports, dining, shopping and theme parks. Orlando International Airport (MCO) also benefits from tourism, being one of the top airports in the world, currently handling an average of 792 arrivals and departures daily. As a result, through 2018, MCO will invest $2.1 billion in improvements to handle the expected continual increase in visitation.
Tourism Lifting Orlando Higher
Through December, Orange County Tourist Development Tax (TDT) collections were running 13 percent ahead of last year’s record pace. This continues the trend of the record demand for hotel rooms and near record occupancy of almost 74 percent in 2014 that pushed TDT for the full calendar year over $200 million for the first time in Orlando history.
We haven’t seen this since 1996. In the mid-1990s, Metro Orlando occupancy was peaking like it is today even though we had roughly 86,000 rooms. Today, we have nearly 119,000 rooms, yet our Average Daily Rate in Orlando is 32 percent higher. Why, you ask?
Consider this. Arrivals of international visitors to Orlando is growing as our tourism industry makes it more welcoming to visit the U.S. Visit Orlando and our members have more marketing and sales pressure against key markets than ever before. And convention business is coming back strong. In 2014, Visit Orlando booked more than $2 billion in future conventions.
With ambitious plans underway to make our world-class airport, theme parks and convention center even better – and Visit Orlando’s plans to position and promote our entire tourism community more than ever before – there’s no telling how high tourism will lift our local economy in 2015 and beyond.
– George Aguel, President/CEO, Visit Orlando