TDC recommends fifth-cent bed tax to help with tourism recovery from COVID-19
The Escambia County Tourist Development Council voted at a special meeting Monday to support a pair of measures to help keep Visit Pensacola afloat and operating while the state's tourism industry struggles in the midst of the coronavirus pandemic.
The TDC approved a plan on how the county could use a fifth-cent bed tax, which would need approval from the Escambia County Commission, and voted to recommend that Visit Pensacola be given up to $1 million in reserve funding to help the tourism industry recover.
Visit Pensacola told the council it has cut its full-time staff by almost half, dropping from 16 employees to just eight-and-a-half. The organization has also faced about a $1.6 million, or 30%, cut in marketing and direct programming, leading to two different pauses in advertising efforts this year.
Visit Pensacola CEO Darien Schaefer said that next fiscal year, promotions and marketing will be a high priority to help with recovery but the projected marketing budget is already down $2 million.
The TDC called the special meeting Monday to come up with a plan on how the county could use money from a potential fifth cent of Tourist Development Tax dollars to support marketing for Visit Pensacola. Last December, the TDC voted to recommend Escambia County Commissioners implement the fifth cent, but the commissioners first wanted a plan for how that money would be spent.
Escambia County is allowed to collect up to five cents on every dollar spent on hotel rooms in the county and spend it on tourism-related activity, with each cent having specific rules on how it can be spent. Currently, the county only collects four of the possible five cents.
The fifth cent is the least flexible cent and can only be spent in one of two ways. The first is to promote and support tourism or a specific venue, event or activity that is attractive to tourists. The second is to pay bonds issued to finance construction or renovation of a publicly owned professional sports facility.
The plan passed by the TDC proposes the fifth cent be collected and dedicated to marketing for the next two fiscal years. After that, the TDC will reconsider the collection of the fifth cent and provide direction on how any future collections might be spent, perhaps as a reserve.
“Another consideration for the fifth cent would be to build up a real reserve for the use of future emergency situations, whether they be economic, environmental, terrorism or pandemic. The counties around us have that reserve in place and are using those dollars right now to continue their marketing efforts,” Schaefer said to the council.
Not all TDC members were supportive of the plan to spend the potential fifth cent, though. Some of the council members wanted to first re-evaluate how the first four cents were being spent by the county and requested the county administrator and comptroller be present at the next meeting in September to go over that information.
Mitesh Patel, TDC member and a Pensacola hotelier himself, said he was concerned over how an additional tax would affect tourism recovery. He made a failed motion asking the TDC to reconsider its previous recommendation from December, when he wasn't on the board, to support the fifth cent.
"I know it may not sound like a lot, but in our world, the hotel world, the hospitality world, this is by far the worst our industry has ever seen," Patel said. "Now for this body to come and say 'Oh, it's just the worst time in history. Let's tax you one dollar extra (per $100).' Any other year we could've talked about this and it wouldn't be so personal."
The TDC also decided unanimously to recommend the commissioners give up to $1 million in unspent TDT dollars that have been collected to Visit Pensacola, which will go to advertising for tourism in the near future. The commissioners' next meeting is Aug. 20.
“We need to do something as we hopefully come out of this to rebuild our community, sort of like the oil spill, where BP dumped a bunch of money and returned our tourism back to a normal level. We need to use whatever resources we have available to be able to do that,” said David Bear, TDC member.
Madison Arnold can be reached at firstname.lastname@example.org and 850-435-8522.