The sun is shining on Florida's tourism industry.
The state welcomed an estimated 116.5 million visitors last year, marking its seventh consecutive year of record-setting visits, as travelers from other U.S. states and Canada flocked to its beaches, theme parks, and other attractions. Most of these guests were domestic tourists, whose visits to Florida rose nearly 5 percent, to 102.3 million, while overseas travelers dropped 4.3 percent, to 10.7 million (see the chart).
Despite geopolitical concerns worldwide, "Florida is considered a safe state to travel," said Ina Lee, a member of the Federal Reserve Bank of Atlanta's tourism advisory board and owner of Fort Lauderdale's TravelHost magazine.
Appealing weather and sandy beaches have always made Florida a desirable location, especially during the cold months, but the state has also become more strategic in its marketing.
Ken Lawson, president of Visit Florida, the state's official tourism marketing arm, said closer attention to where travelers come from and efforts to market the diversity of the state's leisure offerings have paid off. To keep the record visitation going, the state is also focusing on different segments of travelers. For instance, Lawson said his office is making a big push to reach out to the so-called "bleisure" market, or travelers who mix business trips with leisure. "We've started using data more to drive our marketing activities," he said.
Tourism has long played crucial role in the Sunshine State economy
According to Visit Florida spokesman Stephen Lawson, tourism is the state's largest industry, employing more than a million workers, more than 10 percent of its workforce, so the health of the sector has implications for all Floridians (see the chart).
The state has no personal income tax and funds itself mainly with property and sales taxes, which tourism helps generate. In 2016, for example, visitors to Florida spent $111.7 billion, generating $11.6 billion in state and local tax revenue (see the chart). "If we didn't have tourism, we wouldn't be that fortunate," said Lee.
Florida's tourism roots stretch back to the 1800s, when resort areas began to be developed around the state. The area became popular for people seeking leisure getaways and a warm place to recover from sickness. In the early years, vacationers were typically the rich and famous, who were better able to afford to travel to Florida.
The American industrialist Henry Flagler built hotels and railroads in Florida in the late 1800s, laying much of the foundation for the state's tourism industry. Increased use of automobiles and the construction of the Dixie Highway between Canada and Miami in the early 1900s facilitated the influx of more visitors to the Sunshine State. (Many of these travelers were called "tin can tourists" because of their cars and practice of eating canned food.)
After World War II, tourism took off as theme parks and other attractions sprung up around the state. Walt Disney World opened in 1971, making Orlando the state's biggest resort destination. Last year, Orlando became the first U.S. city to exceed 70 million annual visitors, setting another tourism record.
Here are closer looks at some mainstays of Florida tourism:
Orlando. Thanks to Disney World, Orlando is the nation's top tourist destination, drawing 72 million visitors last year. Marketing efforts targeted to the Northeast helped lift domestic visitors to 65.9 million, according to Visit Orlando.
Pensacola. The Panhandle city greeted 2.68 million visitors in 2017, up 29 percent from the previous year. Tourism spending rose 2 percent, to $849 million, and employment in hospitality and leisure in the city was 24,081 in 2017, an increase of 8 percent over 2016, according to Visit Pensacola.
Miami. The city set a record for overnight visitors last year, largely propelled by visitors from Brazil, Germany, Argentina, and Colombia. A special marketing program by the city's convention and visitors bureau helped boost the city's hotel bookings. According to the Greater Miami Convention & Visitors Bureau, visitors tallied 15.9 million in 2017 (an increase of nearly 1 percent over the prior year), tourism spending hit $26 billion (an increase of 2 percent), and leisure and hospitality employment was 144,800 (an increase of 2.4 percent).
St. Augustine. Often called the oldest U.S. city, it is the longest continually occupied European-established city in the continental United States. Spanish explorers founded St. Augustine in 1565, and it is the location of Ponce de Leon's mythical Fountain of Youth. In 2016, the city had 6.6 million visitors, tourism spending hit $1.1 billion, and 29,000 people worked in tourism and hospitality, according to the city's convention bureau.
Multiple challenges to confront
The state has some tourism challenges. International visitors, who tend to stay for longer trips and spend more money, have declined in the past couple of years, Visit Florida data show. Travelers from Canada, the state's top source of international tourists, perked up in 2017 after falling for three previous years.
Lawson said his office sought to reach a wider Canadian audience to educate them about the diversity of leisure options available in Florida. "We love our snowbirds, but we also have younger Canadians who want to enjoy culture," he said.
Florida also faces growing competition from some southeastern cities that are seeing tourist visits hit all-time highs. Atlanta, New Orleans, and Nashville, for instance, have all set records for tourism visits in recent years.
Low unemployment has created another challenge for the industry. The robust labor market makes finding hospitality workers difficult, according to the Federal Reserve's Beige Book report of economic activity. Though the problem isn't confined to Florida, the state feels the pinch acutely because of its heavy reliance on tourism.
"The job market is very tight right now, so getting the service industry personnel needed to fully staff the hotels and restaurants is a challenge," said Lee. She also said broader U.S. efforts to curb immigration were contributing to the labor troubles of service-sector employers.
Variety of destinations remains a strength
From a tourism perspective, Florida offers something for everyone. Though its beaches and theme parks are perennially popular, some travelers are willing to venture off the beaten path and explore different parts of the state.
For example, many travelers from Germany love visiting Crystal River, located on the Gulf Coast about 40 miles southwest of Ocala, to swim alongside manatees, Lawson said. Those kinds of unusual experiences keep people coming back, he added.
"People are drawn to the beauty and magic of Florida," Lawson said. "My job is to make sure that it's fresh."
Karen Jacobs
Staff writer for Economy Matters