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Business Observer Friday, Apr. 22, 2011 9 years ago

Tourism Tug-of-War

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Tourism officials say legislative proposals to move Visit Florida back to state control jeopardizes private investment and the $61 billion industry.
by: Jay Brady Government Editor

REVIEW SUMMARY
What. Visit Florida opposes state reorganization plan.
Issue. Will tourist industry disengage if it loses control of the checkbook?
Impact. State could lose up to $40 million in private sector leverage.



In recent years, Keith Overton contributes more than $50,000 to Visit Florida to promote Florida tourism and his business, TradeWinds Island Resorts on St. Pete Beach.


But Overton says he and other Visit Florida contributors may take their $40 million in cash and in-kind contributions elsewhere if the Legislature moves the public-private partnership under the purview of a larger economic development department chaired by Gov. Rick Scott.


“They're not going to do it if it's under government,” says Overton, also an ex-officio board member of Visit Florida, which promotes Florida worldwide as a tourism destination.


The legislation, already passed in the Senate but still being hashed out in the House, aims to streamline the process for businesses to pursue and receive state economic incentives.


Currently, businesses seeking incentives have several organizations to lobby for funds, including three state agencies and five public-private partnerships, one of which is Visit Florida. Legislators supporting the bills say this results in confusion and weakens the state's ability to respond to proposals that could create jobs.


Speaker pro-tempore John Legg, R-Port Richey, who chairs the Select Committee on Government Reorganization that drafted the measure, calls the House bill a “strategic vision for job creation,” and says the state “can't be so fragmented we're competing with ourselves.”


However, the inclusion of Visit Florida in the new organization, which the House coins Enterprise Florida Inc., has received backlash from tourism industry advocates, who claim the organization is fine the way it is.


“Overall, it's been a very successful model,” Overton says. “I think other states would die to have it.”


The largest point of contention is the tourism industry will lose most control over how its money is spent. Furthermore, there's no guarantee that the private dollars Visit Florida members will contribute in the future will be spent on promoting the state's $61 billion tourism industry.


For 15 years as the official tourism marketing corporation for the state, Visit Florida has been operated as a public-private partnership funded by government and industry partners. It reports to the Florida Commission on Tourism, chaired by the governor, but is composed of 32 tourism industry members.


“It's all about engagement and trust, and the industry is engaged because they can determine what's the best use of the funds the state entrusts them with,” says Visit Florida CEO Chris Thompson.


Overton says he doesn't think his fellow tourism operators will be as willing to support Visit Florida if it loses its private autonomy. “For many, many years we fought for Visit Florida to get out from under the department of commerce,” Overton recalls.



Envied model


In 1996, the state spun-off Visit Florida from the Department of Commerce, making Visit Florida a nonprofit, privately run destination marketing cooperative. Its $67 million annual budget comes from a share (15.75%) of the $2-a-day rental car surcharge generating $18.2 million this year, plus $8.4 million from state general revenue and $40.5 million — about half of which is cash —from private industry contributors. The car rental surcharge money and general revenue represent public dollars, but only the rental car fees go into the Tourism Promotional Trust Fund.


The House measure calls for existing trust funds to be merged into a single $427 million State Economic Enhancement and Development (SEED) fund controlled by the governor. Those funds could be used for affordable housing, transportation, economic development or tourism promotion, without specific allocations for how the money will be spent.


The governor and a board he controls make those allocation decisions, and this group would have broader responsibilities and other priorities than the Florida Commission on Tourism or the Visit Florida board.


That means that $40.5 million, 60% of Visit Florida's budget, could be at risk should tourism industry partners decide they no longer want to contribute to a fund that may not promote their businesses. Also, trust fund money from the rental car surcharges could thus be spent for non-tourism related purposes.


Visit Florida knows its priority. Its mission is for the state to be the No. 1 vacation destination in the world. It's the first state destination marketing organization to earn accreditation by the Destination Marketing Association International.


“We're the model that everyone envies,” says Virginia Haley, president of the Sarasota Convention and Visitors Bureau. Haley says the Visit Florida board of directors passed a resolution April 8 calling for it to retain its current industry-led governance and remain an autonomous public-private partnership with a dedicated funding source.


“There's universal agreement that Visit Florida isn't broken,” she says.



Room for compromise


The House measure, a 677-page proposed committee bill of the Select Committee, merges three nonprofit public-private partnerships — the Florida Sports Foundation, the Florida Black Investment Board, and Visit Florida — into Enterprise Florida Inc., a single nonprofit public-private partnership.


Gulf Coast legislators dominate the 23-member committee with seven members including the chairman and vice chairman. Legg is the official chairman of the committee, although the April 8 meeting was led by its vice chairman, Rep. Gary Aubuchon, R-Cape Coral.


Visit Florida is the d/b/a name for the Florida Tourism Industry Marketing Corporation. The Florida Tourism Commission, a 33-member board chaired by Gov. Rick Scott, currently oversees its operations. It gets input from a 54-member board of directors representing a cross-section of the industry. Board members serve on a dozen committees including advertising and Internet, marketing council, promotions, and government relations.


Space Florida, an independent special district, would also become a division of Enterprise Florida. Space Florida promotes and develops space-related economic development and education around the state, not just around Kennedy Space Center.


Enterprise Florida would become a division of the new Department of Economic Opportunity, or what the Senate labels Jobs Florida. The Senate Bill, SB 2156, also combines the same three nonprofits, plus Space Florida, into the Jobs Florida Partnership Inc., a not-for-profit corporation.


Currently, the Office of Tourism, Trade and Economic Development (OTTED) oversees the activities of these public-private partnerships.


In the House version, Enterprise Florida would be headed by a president, who would also serve as commissioner of the Department of Economic Opportunity. That president is likely to be Gray Swoope, hired by Gov. Rick Scott about two months ago to lead Enterprise Florida.


Scott would serve as chairman on the 11-member board, but only one of those members must represent the tourism industry, giving tourism officials another reason for concern.


The governor appoints four members, and the House speaker and Senate president would appoint three each.


Tourism industry officials say its akin to taxation without representation because the hotels and attractions that have been donating to Visit Florida's advertising budgets won't have as much a say on how their money is spent under the proposed structure. “The more say they have the more they're likely to buy in on it,” says Robert Skrob, president of the Florida Association of Convention and Visitors Bureaus. Skrob's members are among those leading the charge to find a compromise if they can't keep the current arrangement.


One compromise solution may be in how the funding is managed. “We would love to have some sort of designated funding,” says hotelier Tony Lapi, chairman-elect of Visit Florida, and owner of Tween Waters Inn Island Resort on Lee County's Sanibel Island.


Lapi may be in as good a position as anyone to help make that happen because, in addition to his position with Visit Florida, he's well-known to Aubuchon, who's also chairman of the powerful Rules Committee.


Aubuchon concluded the April 8 committee meeting he chaired by speaking to Visit Florida advocates assuring them that he heard their concerns. He also said that he had recently had his 25th anniversary dinner at Tween Waters and expected to be speaking to Lapi again about Visit Florida's issues.


For Lapi's part, he says he's willing to be patient and see how things shake out between the governor and the Legislature and expressed confidence in both the Legislature and particularly the governor, saying, “I think the governor realizes the value of tourism. There's no question in my mind that he certainly gets it.”

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