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Oil Money - Post BP Oil Spill, Bed-Tax Collection Rates Up

In the summer of 2010, as oil spewed from a broken well in the Gulf of Mexico, tourist-dependent communities in the Panhandle saw bed-tax collections plummet — 10% in Panama City, 20% in Walton County and 18% in Escambia County.

The BP Money Trail

» $62 million — To the state for tourism marketing. The payments started in May 2010 and continued through 2011.Most of it was spent by April 2012.

» $45.8 million — To the Panhandle counties of Bay, Escambia, Franklin, Gulf, Okaloosa, Santa Rosa, Wakulla and Walton

» $11.8 million — To Visit Florida

» $4.2 million — To Broward, Miami-Dade, Lee, Monroe and Pinellas counties

The spill’s hangover proved to be short-lived, however. A year later, bed-tax collections in Panama City Beach surged 50% to a record $1.8 million in July 2011. “It was the single biggest July in the history of Panama City Beach,” says Dan Rowe, CEO of the Panama City Beach Convention and Visitors Bureau. Nearby counties report double-digit increases in bed taxes in 2011 and again in the first six months of 2012.

Tourism officials in northwest Florida credit the rebound in part to a slew of advertising campaigns funded substantially by BP, which gave $45.8 million to eight Panhandle counties for tourism marketing as consolation for lost revenue in 2010.

Panama City Beach alone received $10.6 million from BP for tourism marketing. Rowe used the money to target tourists in established markets such as Atlanta and Birmingham, but also in new markets such as Houston, Washington, D.C., and Nashville. “Having those additional resources was really critical to us,” Rowe says.

Dawn Moliterno, executive director of the South Walton Tourist Development Council, says the council’s $2-million marketing budget ballooned to $10 million in 2011, thanks to BP. The money allowed her to advertise the region’s coastal communities, such as Seaside, on television for the first time. She says the ads have produced a 16-month streak of double-digit increases in bed-tax collections for Walton County.

A major addition to the area also has helped bring tourists in: Panama City’s Northwest Florida Beaches International Airport, which opened in May 2010 and is served by both Southwest and Delta, reported a 34% increase in passengers. This year, passenger travel declined slightly in January and February before rebounding; overall, traffic is up 5%.

Tourism directors expect growth to continue even as BP shuts off the money spigot. In some counties, the spill sparked interest in maintaining a larger marketing budget. Escambia County is using its own funds to replace $5 million in BP money, says Vice President of Tourism Development Terry Scruggs. “The business plan is to expand to other regions of the country and go international.”