Tourism tax revenue in Flagler County is down 6.4 percent in the first six months of the fiscal year–October through March–as vacation rentals and leisure-room occupancy in local hotels has fallen after what Tourism Director Amy Lukasik describes as the “record-breaking years of Covid, when Florida remained an open destination as other states and countries took safer and saner protections for their residents.
Year-over-year declines in tourism tax revenue were especially sharp in November and January, with 11 and 14 percent declines. Tourism tax revenue in those six months totaled $1.68 million, compared to $1.79 million the previous year. That’ll make one of the Flagler County Commission’s current goals–to “Increase visitor spending in all tourism related sectors”–difficult to achieve.
The decline could implications for the local workforce, 18 percent of which is “in the tourism cluster,” Lukasik says. But county unemployment numbers have been flat in the last six months.
“We’re going back to a little bit of normal, those were record-breaking years,” Lukasik said in a summary report to the Tourist Development Council last week. At a recent conference of tourism directors she attended, she heard from other directors and was “relieved that we are actually OK, when you compare. The numbers Florida was seeing post-covid, 2023 and 2022 were record-breaking. The reality is that we may not hit those numbers again, because people have more choices now. It feels like everyone was joking, saying like the whole world has been to Florida. So where are they going to go somewhere else next year. But again, it’s competitive. So that’s why the marketing has to be aggressive, very targeted. And it’s very important that we never stop doing that.”
Florida saw a 1.6 percent decline in visitors in 2023, when it drew 135.02 million visitors, compared to 137.4 million in 2022.
Flagler County levies a 5 percent sales surtax on short-term stays such as in hotels, motels, RV parks, vacation rentals and the like. The tax generated $4.6 million in fiscal 2023, which ended in September. The money is split three ways: 20 percent is appropriated to capital projects that draw tourists (a $739,000 tourism grant helped pay for Palm Coast’s Southern Recreation Center, for example). 20 percent is appropriated to beach restoration (the county has used TDC dollars to help pay for dune reconstruction). Marketing and advertising accounts for the remaining 60 percent of spending.
Other indicators, calculated for the full calendar year of 2023 (ending in December) rather than the fiscal year, point to similar declines: a very slight 2.1 percent drop in the average daily hotel room rate (to $151), with another continued, sharper declines in January and February when compared to a year earlier, a 22 percent decline in rates charged locally by Airbnb and Vrbo, the vacation-rental companies. (There were 652 vacation rentals out of single-family homes in Flagler County, 45 out of homes only partially used for that purpose, 23 are run out of duplexes, and 751 are run out of condos or town houses.) The tax revenue decline is not affecting the county’s five-person tourism bureau and its ongoing initiatives.
The declines were echoed essentially in real times by local hoteliers, some of whom sit on the tourism council. “Everything is trending down,” Lisa Robinson, the general manager at Hampton Inn and Suites said, citing losses of $39,000 last year that were offset by higher gains in January and February.
Stephen Baker, the director of group sales at Hammock Beach Resort, said the hotel is booking about 2,000 more room nights than last year for business groups, but leisure bookings are down. “We’re pretty even flat overall the last year for the first quarter, and cutting back on a few other things to make budget for that [first quarter]. But just looking forward and trying everything we can for the leisure market. There’s just a lot of other avenues for them to go, it seems.” The hotel just hired a new marketing director, and invested into a $30 million clubhouse at the Conservatory, which it hopes to market to local and regional events–seminars, weddings, business events.
Locals are the majority users of Flagler County’s amenities, not visitors. In a study for the tourism office of main beach locations–the River to Sea Preserve, Varn Park, Jungle Hut Road, Old Salt Park and Bay Drive Park–proportions of local users ranged from 54 to 72 percent. Among travelers into Flagler, almost 20 percent were from within 100 miles–Orlando, Daytona Beach, Melbourne. Curiously, a larger proportion was from Atlanta (10.6 percent) than from Jacksonville (8.5 percent).
Dan Mundrean, the general manager at Palm Coast’s Hilton Garden Inn, described economic conditions at the hotel as “pretty much lateral compared to last year. March was a very slow month for us, considering Bike Week fell short for us and in the Volusia Daytona market. It was a little slow.” He has better hopes for the second and third quarters. “My leisure market has been good, Sunday through Thursday, business has been really really good. We are slightly behind on weekends and can’t figure out why,” he said. “Maybe the hammock is stealing all my business,” he quipped.
So it was left to Palm Walker, the veteran travel writer and adviser who’s been on the tourism council longer than anyone there, to be the voice of reassurance and perspective, explaining what’s been going on. “Do not despair,” she said. “Everybody’s going to Europe. Europe is over the top. That’s where people are going. I think when they get tired of going there or they can’t find the space there or it’s too expensive, they’ll be back. So heads up.” (According to Courthouse News Service, hotels in Europe in 2023 “reported visitors spent 1.92 billion nights in Europe, a 1.6% increase from pre-pandemic levels and up 6% from 2022.”
“Also the cruise lines out of Canaveral are killing us because they are so cheap,” Walker said. She’d just been told of a four-day cruise out of Tampa for just $109, all inclusive. “That is incredible. There’s no way that we locally can compete with things like that. So don’t despair. I’m sure it’s coming back in the fall. But right now June, July and August, before school starts again. The whole world is going to Europe.”
It’s not necessarily going to help that Flagler Beach, the leading beach destination in the county, is ramping up as construction ground zero now and for the rest of the year as the Margaritaville Hotel continues its build-up, a seawall construction project starts at the south end of town, the long-awaited beach-renourishment, or dune-rebuilding, project begins in July, and the demolition and reconstruction of the pier takes place later this year. The beach project alone, Flagler Beach Commissioner Eric Cooley said, “is going to have a very significant change to the landscape of the entire county since Flagler Beach is pretty much one of the main destinations.” But for all the construction, “Flagler Beach will actually go back to having a beach.”
