GlobeSt.com UPDATE: September Hotel Room Tax Collections Dip 32% in Orange; 22% in Osceola

ORLANDO-The headlines get your attention but the numbers tell the real story in metro Orlando’s 110,000-room hotel industry at least. Tax collections revenue is down but it isn’t a catastrophe, industry analysts and local government officials say.

“The market is holding up generally well in spite of negative domestic and international economic news,” Robin L. Webb, a hospitality industry consultant for 30 years and vice president/managing broker, Arvida Realty Services Commercial Division, Winter Park, FL, tells GlobeSt.com.

While September collections of the 5% tax on rooms fell 32% for September in Orange County and 22% in neighboring Osceola County, the total collections for fiscal 2001 ended Sept. 30 was $104.8 million.

That’s the second highest revenue total in the 23 years since the tariff began, according to Orange County comptroller Martha Haynie. Last year’s record collections totaled $108.2 million, $3.4 million more than this year. The collections never hit the $100 million mark until last year.

“Going under the $100 mil threshold would have been cause for real alarm,” an International Drive hotelier tells GlobeSt.com on condition of anonymity. “But staying in the $100 mil house means we are surviving with a good chance of recovering lost revenue and lost guests some time in 2002.”

The 32% September drop mirrored the numbers forecast earlier by Haynie. She called for a dip of 30% to 35%. The county still has $140 million in reserves.

Tax collection monies are used largely by the county to fund convention center expansions and promote Central Florida’s $1 billion-plus tourism industry. That’s why elected officials in neighboring Osceola County are concerned over their collection numbers.

Osceola collected a total $23 million for fiscal 2001, down 6.6% from 2000. In September, the last month of the fiscal period, the county garnered $1.23 million, 22% off from last year’s $1.58 million. Osceola has $12 million in reserves.

But Osceola commissioners are wondering if that amount will still leverage construction financing needed for a $71 million agriculture center, a $44 million convention center and $18 million in renovations to Osceola County Stadium where the Houston Astros play their spring training games.

Tourist collections in Orange County this year have been down for seven consecutive months; in Osceola, for nine months.

Average daily room rates are $77.19, down from an average $86.44 at this time last year, according to Smith Travel Research of Hendersonville, TN, an industry tracker. Occupancy is averaging 68%, down from an average 82% last year.

“Clearly, corporate America is tightening its belt,” Arvida’s Webb tells GlobeSt.com. “However, business travel in the Central Florida market is a relatively small percentage of hotel occupancy.”

A growing trend among vacationers, however, is the use of lower-priced hotels.

“The five-star hotel guest is probably staying in a four-star hotel and the four-star guest is probably leaning more to the limited service and extended-stay brands, particularly when he or she is spending personal funds,” Webb says.