Home Business Economists project mid-2021 turnaround for Florida’s $90B tourism industry

Economists project mid-2021 turnaround for Florida’s $90B tourism industry

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Florida’s $90 billion tourism industry will begin to rebound about mid-2021 with the number of visitors forecast to be near pre-pandemic levels in 2022, state analysts project.

According to a Florida Economic Estimating Conference (EEC) outlook posted Tuesday, the state could see 30 million visitors a quarter again by the third quarter of 2021 – July-September.

The EEC projects overall visitor numbers will fall just short of 2019’s total of 131 million visitors by 2022 and surpass 2019 by 2023.

The EEC is one of a series of data reviews conducted throughout the year, such as the Revenue Estimating Conference (REC), by economists and legislative analysts from various state departments and agencies.

Figures compiled and projections generated by the conferences are the numbers and data lawmakers will rely on when they convene committee meetings in January in anticipation of the 60-day legislative session, which begins March 3.

Much of the projected $2.7 billion revenue shortfall Florida lawmakers will contend with during the session in putting together a fiscal year 2022 budget stems from pandemic induced losses in sales tax proceeds from the tourism and hospitality industries.

With an income tax, Florida’s state government is heavily dependent on sales tax revenues generated by travel and tourism. This year, state economists project nearly $7 billion of the estimated $30.4 billion in sales tax revenues the state will collect will be tourism related.

The EEC’s report, based on September projections, followed last week’s announcement by Visit Florida, the state’s public-private marketing agency, that the number of tourists declined 68% in the second quarter of 2020 (April-June) and nearly 32% during the third quarter (July-September) compared with the same quarters in 2019.

According to the report, how quickly the state’s tourism industry rebounds will rely on how quickly COVID-19 vaccines are distributed and when foreign travel resumes to pre-pandemic levels.

“Current expectations are that leisure driving vacations will recover first, and then – in order – business travel, domestic air travel, and international travel,” EEC’s September report said. “The timing will be further influenced by the actual course of the disease and the recovery from the recession.”

In its outlook posted Tuesday, EEC economists and analysts projected overseas visitors will reach 3.7 million in 2022, about one-third of the 10.9 million foreign national visitors from 2019.

The EEC projection doesn’t forecast overseas visitors topping 10 million until 2028, although it projected 3 million Canadians – who now can fly but not drive to Florida – will be visiting the state in 2023.

Florida’s conference projections have been a bit rosier than industry forecasts.

The conferences have been using an economic forecasting model based on studies of post-pandemic economic recoveries to project it could take 12-15 months to claw back to pre-pandemic employment and revenue generation levels.

Several tourist and hospitality industry groups, however, forecast it will take at least two years for Florida tourism to recover from the pandemic, and in September, the Joint Legislative Budget Commission said Florida’s tourism sensitive economy will remain vulnerable to the longer-term effects of any pandemic for several years.

“Previous economic studies of disease outbreaks have shown that it can take as much as 12 to 15 months after the outbreak ends for tourism to return to pre-disease levels,” the commission said. “The magnitude of this event is greater.”

The projected rebound is unlikely to have begun this Thanksgiving, with AAA Florida Auto Club projecting a 44.4% decline in air traffic arrivals over the next four days compared with last year’s Thanksgiving holiday.

AAA forecasted 5.4% fewer Floridians would travel Thanksgiving Day through Sunday.

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