March hotel bookings dip 15%; state economic leaders discuss creating $40 million war fund
By Frank Norton
March hotel bookings in Miami-Dade County are down 15% from the same month last year, according to Visit Florida, the state's marketing agency.
The findings indicate that tourism recovery is stalling and that Greater Miami and the Orlando area, also down 15%, are most vulnerable in a pre-war economy. Both tourism economies rely heavily on long-distance travelers.
Local and state hospitality experts say the outlook for both destinations will darken further if the US continues toward a war with Iraq.
"I don't think we're in a recovery mode, I still think we're in tourism downturn," said David Kelsey, president of the South Beach Hotel & Restaurant Association.
"The concern now is that business may be a little worse this year than last," he said this week.
In 2002, the Sunshine State attracted a record 75 million visitors, according to Visit Florida, as national and foreign travelers grabbed record-low travel and lodging rates.
On a statewide average, March reservations are only down 5% from 2002, according to the Florida Hotel & Motel Association. But the group's projections show that increased security concerns will cut international travel and rip into the state's most aviation-dependent destinations.
About 96% of Miami-Dade County's visitors arrive by air, according to the Greater Miami Convention & Visitors Bureau.
Bud Nocera, Visit Florida executive vice president, presented the survey of hotel business at Gov. Jeb Bush's Economic Summit Monday in Tallahassee.
"The March findings show that recovery is weaker than expected for our major metro areas," he said, "which draw much more from international and air-travel markets."
Now, with the possibility of war looming larger, state economic advisers recommend setting aside at least $20 million in emergency funds to keep Florida's vulnerable aviation, tourism and trade sectors afloat.
Gov. Bush's Council of Economic Advisors and Transition Team, including Secretary of State Glenda Hood, want to earmark emergency funds for use during a protracted war scenario. Such contingency funds would probably be matched by private sector contributions.
"We're really talking about a $40 million campaign for a protracted situation," said economist J. Antonio Villamil, who chairs the Governor's Council of Economic Advisors.
Dr. Villamil, who also heads the Washington Economics Group in Coral Gables, was in Tallahassee on Monday to present war-impact mitigation strategies to government officials as a prelude to the governor's State of the State address Tuesday.
Public and private sector economists this week said the start of a war could cast away many uncertainties holding back consumer and business spending.
"We're in the worst period because businesses are discounting now the possibility of war in the future," Dr. Villamil said.
Much of the potential damage to key sectors has already been felt, he and others said, especially in Miami and Orlando, where trade and service industries rely heavily on aviation.
The total number of flights in and out of Miami International Airport was down about 14% in February compared to two years ago, while passenger figures decreased nearly 10% over the same period, said William D. Talbert III, president and CEO of the Greater Miami Convention & Visitors Bureau.
"Any community that depends heavily on international air travelers is going to be down right now," he said.
Strategies for alleviating further damage include beefing up advertising dollars for drive-market tourism, assisting and retraining displaced workers and promoting economic diversification, said Pamella Dana, director of the state's Office of Tourism, Trade and Economic Development.
"Based on what various experts are saying, I think $20 million to $50 million would be a sound contingency to have available," she said.
Enterprise Florida, the state's economic development agency, recommends $10 million be set aside to advance high-impact public works projects and $2.5 million to aid small businesses.
The agency is also seeking $10 million to $20 million in federal funding to set up a disaster-preparedness model, according to Darrell Kelley, President & CEO of Enterprise Florida.
Visit Florida, the state's tourism marketing agency, has identified four potential degrees of conflict and developed mitigation and recovery strategies for each.
"If this were a rapid and tidy military campaign there would be no need to seek additional state funding. But if it were protracted it would be appropriate to seek additional resources from the state," said Visit Florida spokesman Tom Flanigan, referring to a $20 million state-led campaign to promote in-state travel in the months immediately after 9/11.
Gov. Bush in his State of the State address also compared Florida's need to prepare for a wartime economy with the measures taken immediately after the 2001 terrorism attacks.
"Remember that after the terrorist attacks of Sept. 11, we did more than merely mourn the loss of our countrymen...," he said in his annual speech to his Cabinet and legislators.
"We shored up our important tourism industry through a $20 million commitment for Visit Florida. We created Operation Paycheck to retrain laid-off workers for new jobs in high-demand sectors of our economy. With the same vision and resolve, we must now work together again. We must create a contingency plan that will allow us to take action quickly," the governor said Tuesday.
"To strengthen our economy, for example, we should support our vital tourism industry, in part by marketing in-state travel opportunities for our own residents. We must also shift our economic development efforts - including through Enterprise Florida - to focus more aggressively on business retention and expansion."