You Paid For It: New study concludes tourism spending a loser for taxpayers

Visit Tampa Bay images
Visit Tampa Bay images

(WFLA) — A new economic study finds that spending public money to promote tourism in Florida and many other states is an enormous loser for taxpayers.

“Raw advertising is just not paying off for taxpayers in Florida or anywhere else,” said Ball State University economics professor Michael Hicks, a co-author of the study produced for the Mackinac Center for Public Policy, a conservative, free market think tank.

An Analysis of State-Funded Tourism Promotion

That study throws cold water on the tourism promotion industry just when there is a titanic political struggle underway that will soon decide the fate of Visit Florida, the private tourism promotion agency funded by $76 million state tax dollars. On a local level Visit Tampa Bay, another private tourism promotion agency, counts on $12.5 million tax dollars to lure visitors to Hillsborough County.

Visit Florida cites research from the Florida Legislature’s Office of Economic & Demographic Research to brag that every tax dollar spent by that private agency to promote tourism generates $3.2 tax dollars for the state.

Visit Tampa Bay, Hillsborough’s version of Visit Florida, hires private market research consultants who claim that agency generates between $69-$79 in economic benefit for every tax dollar spent.

Professor Hicks insists that both Visit Florida and Visit Tampa Bay are publicizing economic development benefits that simply don’t exist. “It’s just factually incorrect,” Hicks said. “Our study is very consistent with other studies on the matter the transparent peer review studies, but they do diverge greatly from those on whose jobs depend on public dollars spending.”

Santiago Corrada, CEO of Visit Tampa Bay likes to brag that “we export money” as part of his organization’s tourism promotion success. Corrada disputes the findings of the Mackinac study, without saying why it’s so off base in it’s conclusions.

“That’s what makes America a great country,” Corrada said. “We all have different opinions and we can have a civil conversation about it.”

Hicks claims his academic research of public tourism spending in Florida and 47 other states from 1973-2012 indicates that spending public money to advertise for tourism is an absolute loser for taxpayers—a waste of your money. Hicks and his co-author Michael D. Lafaive concluded that for every $1 million in public money spent to advertise tourism, the return to hotels and restaurants amounted to a measly $20,000. In other words a 98% loss, far from the huge gains talked about by Governor Rick Scott during a whirlwind tour of the state this week, promoting Visit Florida.

“We know we’re doing a good job. We’re having record tourism for Florida. That’s a lot of jobs for families,” Scott said.

Read: Out of state campaign results

Read: In-state campaign results

Hicks’ insists that booming tourism has more to do with the recovering economy, great weather and Florida’s many attractions, than state advertising through Visit Florida. He said state tourism promotion spending increased in 2007, but tourism plummeted the following year when the recession hit in 2008.

Hicks invites peer review of his research, but said that’s not possible because the private consultants who work for tourism promoters don’t provide their data or methodology for independent verification. “My work can be replicated by any grad student in economics anywhere in the country and I really think that is the telling element of the quality of the research,” Hicks said.

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