Visit Orlando has one of the largest budgets in the U.S. and is the envy of destination marketers. All eyes are on what happens next.
Visit Orlando may see a cut to its $100 million budget – one of the largest destination marketing budgets in the United States.
“The general consensus here is that there needs to be a general reduction beyond what I recommended,” said Orange County Mayor Jerry Demings at an Orange County Commissioners Board meeting Tuesday. Commissioners will have “conversations” with Visit Orlando on what that looks like, said Demings.
The meeting centered on Visit Orlando’s tourism promotion agreement with the county and the future allocation of tourist development tax dollars.
“At this time, no decisions have been made,” said Visit Orlando CEO and President Casandra Matej in a statement. Visit Orlando looks “forward to continued dialogue.”
Under the current contract, 30% of the county’s tourist development tax revenue goes toward Visit Orlando’s budget. The revenue comes from guests paying a 6% tax on their hotel and short-term rental room reservations.
Under the contract, for fiscal year 2023, Visit Orlando got $105 million. For fiscal 2024, it will have $108 million. If there are no changes to the contract, it will get an estimated $125 million by 2026.
Alternative Uses for Lodging Tax Dollars
At the meeting, commissioners discussed changing the contract structure, how much to cut Visit Orlando’s marketing dollars, where to allocate funds and the value of destination marketing. Some want to put the money toward uses like local capital projects or affordable housing.
“Nobody on here is saying marketing is bad,” said Orange County District 3 Commissioner Mayra Uribe. “What we’re saying is there are other ways to spend those funds to increase people to visit Orange County, to visit Central Florida.”
Uribe pointed out that the region has other marketers such as Disney World and Sea World. “We’re not the sole marketer in this region,” she said.
What Losing Marketing Dollars Means
Visit Orlando executives and staff attended the meeting to defend their tourism promotion budgets.
Visit Orlando Board Chair Terry Prather explained the impact of cuts: “Some things that we do now, we wouldn’t do, whether it’s reach, frequency, the way we advertise around the world,” he said. “Something would have to change.”
Visit Orlando’s marketing efforts would be scaled back, Matej told Orange County Commissioners. There would be cuts on spending on “high impact big ticket items” like a 3D billboard or a Netflix show.
Marketing would be less frequent. “We’d have to look at more seasonal vs always on at a time when consumers are thinking about their next vacation,” she said.
Visit Orlando would have to “pull back” in some international markets, said Matej. The DMO goes after 8 international markets and plans to bump it up to 11 next year.
Everyone Wants Orlando’s Budget
Visit Orlando has one of the largest destination marketing budgets in the U.S. Its budget even exceeds Visit Florida’s $80 million budget.
Other destination marketing organizations view its funding mechanism and budget as key to its success. “How do we compete with the Orlandos?” said Fred Dixon, CEO and President of NYC Tourism + Conventions. “They have gotten more funding. Our budget by comparison today is, we’re about $35 million.”
Orlando was the U.S.’s largest travel and tourism city destination in 2022, having contributed over $31 billion to the local economy and was up $2.7 billion from 2019, according to the World Travel & Tourism Council. The city was the only major city to “maintain its industry edge with international visitors,” with this group’s spending up by almost 20% from 2019.