GlobeSt.com EXCLUSIVE: Hospitality Industry's $100M Bed Tax Collections in Play

ORLANDO-For an industry struggling to regain pre 9-11 financial health, the average annual $100 million in bed taxes collected on Central Florida’s 113,000 hotel rooms could be the savior, local consultants and brokers tell GlobeSt.com.

For others, however, especially neophyte politicians running in the November general elections, the hoteliers’ kitty provides fodder to feed a growing controversy on how to fund the area’s urgent need for new school construction and badly needed renovations to existing structures.

Others, like county chairman Rich Crotty, the county’s former property appraiser, favors spending a surplus of the tax money in later years on buying prime land parcels to create open space and donating some funds to the burgeoning arts community.

But hotel consultant Robin L. Webb, who was on the board of directors for the Florida Hotel and Motel Association when the bed tax was created 25 years ago, tells GlobeSt.com the $100 million kitty should be spent exclusively on hospitality industry-promoting ventures.

“I feel very strongly about this issue,” says Webb, who is vice president/managing broker, Coldwell Banker Commercial NRT, Winter Park, FL. “I know first hand that the association negotiated in earnest with lawmakers in Tallahassee and many county politicos to be certain that the funds raised by travel and tourism went back into the industry to support continued growth of the industry.”

Webb says “the geometric growth of the industry since that time (about 1977) in our state has enabled the local and state economies throughout Florida to survive, even in times of national recession.”

Webb, a former hotel manager, says “thanks to the travel and tourism industries and the wise recommitment over the past 25 years of bed-tax revenue, Florida has been somewhat of a safe haven for employment and stability, minimizing layoffs in bad times and promulgating dramatic, significant growth in better times.”

He cautions politicians who have not understood the original intent of the bed-tax legislation that “these are not general revenue funds. The hands-off policy practiced in much leaner times should be respected for now and in the future.”

South Florida hoteliers are not experiencing the pressure their Central Florida counterparts are facing on the bed-tax issue, longtime Miami hotel consultant Sheldon Greene, president, Sheldon Greene & Associates Inc., tells GlobeSt.com.

“I am certain that there are very valid arguments for both sides,” Greene says. “Certainly, hotel people are concerned about roads (how would their guests get to their hotels?); and schools (their employee’s children should expect quality education, and you need to attract good employees because the employee needs to think about his family education and welfare); and law enforcement (you want your guests to feel comfortable and relaxed in the hotel’s neighborhood and environment).”

Greene tells GlobeSt.com, “It’s not a black and white matter.” He says, “I suspect that the hoteliers (in Orlando) want to maintain control; want to make sure the monies are directed to specific hotel programs–but the reality is that hotels are not (located) on islands.” The consultant says, “They are part of a community and the hoteliers have a responsibility to the community and vice versa.”

Greene doesn’t rule out allocating some of Orlando’s average annual $100 million bed-tax revenue for non-hotel projects. But he tells GlobeSt.com, “Politicians may not be the best people to decide where the money is spent.”

He says, “This is heightened in my mind when I see our country’s security issues decided on (political) party thinking and not what is best for the country.”

Greene is confident “a formula or arrangement could be arrived at that would funnel some of the money to non-hotel specific purposes.” He says, “In my heart, I believe that hoteliers would like to see this happen, simply because they are part of the community in which their hotels are located.”

At the same time, hotel owners are concerned “that their business may suffer and that they may lose control over the use of money, ” Greene says. “ I think there should be room to come to a happy arrangement which would be good for everybody. My skepticism (on the issue) is toward the politicians.”

Commercial developers, such as George D. Livingston Jr., chairman, Realvest Partners Inc., Maitland, FL, are divided on the hotel bed-tax funds issue.

“I have mixed views,” Livingston tells GlobeSt.com. “On the one hand, there is a clear need. On the other hand, the amount available would only a drop in the bucket.”

He says, “Remember, too, that hotels pay impact fees to pay for roads, infrastructure and other civic service needs when the hotel properties are first constructed.”

Livingston likens the controversy on how to use the funds to “the camel nose-in-the-tent issue.” Once the funds are allocated for non-hospitality needs, “the golden egg will have been cracked,” he says.

The developer says, “We need the cash to counter things like 9-11.” Livingston favors adding another tax on the hotel bills to pay “for what ever” is urgently needed in the community at a future date.