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I have established this blog as a means of transparency to the public, outreach to the community, and information dissemination to all who choose to look. Feedback is welcome, but because public participation is equally encouraged, appropriate language and decorum is mandatory.

Wednesday, August 9, 2023

90% Growth in Available Units for Short Term Rentals Is What Fueled Dramatic Rise in Perdido Key Bed Tax Collections 2021-2022


 Recently there has been a series of meetings aimed at improving and enhancing the advertising of Perdido Key in District 1.  For the last several years, all county marketing has been centralized under the "Visit Pensacola" brand.  I'm told by folks familiar with this matter that "Perdido Key gets plenty of coverage and advertising--just look at their year over year tourist tax development (TDT) collections growth--that's the proof."   Nobody is knocking what Visit Pensacola does, it is just that Perdido Key is not Pensacola Beach--they are two separate and distinct areas of the county.

Currently, the Perdido Key Chamber of Commerce leases the Perdido Key visitor's center from Escambia County.  Within the visitor's center, "Visit Pensacola" maintains a presence, complete with rack cards, displays, and murals. There are also multiple employees of Visit Pensacola who staff this visitor's center through the week.  One issue that has been brought to my attention by the Perdido Businesses and citizens with whom I have spoken is that the Visit Pensacola employees who work in Perdido Key often recommend out of the area restaurants and other attractions to visitors who are coming to Perdido Key.  In one instance, a guest asked where a good restaurant was for a bite to eat.  Instead of pointing this particular guest to the Florabama, Crab Trap, Oyster Bar, or the Sunset Grill---the employee said "I'd recommend you go to Pensacola Beach, to the Grand Marlin"   There have been other similar occurrances of which I have been made aware.

In addition to this, there has been a lot of disdain about Perdido's Chamber of commerce--because as a state line chamber of commerce--they naturally have some members in Alabama.  About 60 of the 400 members of the Perdido Chamber of Commerce are Alabama businesses.  Of that 60 Alabama entities, however,  only 5 (Five) collect 5 cent bed taxes.  And of that five---4 of the 5 are owned by well-respected Escambia County businessman, Julian McQueen's.  company Inisfree Hotels.

Nobody is trying to knock Julian McQueen's hotels in Alabama.  It is a separate market from Pensacola Beach---very different and unique.  And Perdido Key actually lines up more with them and is closer in proximity to that market than it is to Pensacola Beach.  Perdido Key is 25 miles away from Pensacola Beach.

Meanwhile, back at the visitor's center in Perdido Key--rack cards are meticulously controlled by Visit Pensacola, with one such prominent rack card advertising an Out of State (Alabama) Gambiling Casino and another announcing "Welcome to Pensacola Beach!"  Of more than 100 posts to Visit Pensacola's Instagram over the last year--not one post had a #Hastag Perdido Key.  Every single one of the posts had hastags for Pensacola Beach or downtown.  Additionally, a recent perusal of the "Beach Events" page on Visit Pensacola was all but EXCLUSIVELY spotlighting Pensacola Beach, with the reader having to go eight clicks deep through the pages to find even one Perdido Key beach establishment listed.  The Perdido Key Chamber's website is not linked to Visit Pensacola's site for reasons unknown, yet Pensacola Beach's Chamber website is linked.  Why is that?

Perdido Key feels neglected and the businesses out there are not happy about it.  Remember, they are the #2 highest collector of Bed tax dollars behind only Pensacola Beach, in all of Escambia County.

Yet, I'm told if we bolster the Perdido area with better, more directed marketing--we will essentially be "Sending money to Alabama businesses." or "Competing against ourselves [Escambia]." I simply disagree.  It is a cop out and I can tell you as a person who frequently spends time at a Pensacola Beach Condo I own---visitors to either location will vote with their feet as it pertains to food and beverages; e.g. just because they are staying in Pensacola Beach or Perdido Key does not mean every dollar such visitor spends will be in Escambia County's jurisdiction.  People travel, people eat and drink out of jurisdiction.  Do I want all people in both locations to only spend money in Escambia County's jurisdiction so we collect the sales tax?  Of course.  Is that a realistic expectation?  no.  In Pensacola Beach, a vast majority of long duration visitors buy groceries over the bridge at Publix or Wal Mart.  All name-brand pizza delivery companies that deliver on Pensacola Beach to visitors staying there (Dominos, Pizza Hut, Papa Johns)  similarly are located out of our taxing jurisdiction, over the bridge in Santa Rosa County where the grocery stores are.  And when these visitors gas up their vehicles, by and large they skip the one high-price gas station in Pensacola Beach for one of the significantly less-expensive stations in.........drumroll.......you guessed it--Gulf Breeze   Santa Rosa County, out of our jurisdiction.

Similarly--in Perdido Key visitors staying in condos there may go over to Cobalt of the Hangout in addition to spending money in Escambia County at Perdido area restaurants.  

So--food an beverage choices happen, we can't hold visitors hostage at either beach once they arrive there for a visit.

But the money we are discussing, TDT, are not collected anywhere other than lodging accomodations, not at retail establishements or restaurants--so those discussions are red herrings anyhow, when we are talking about year over year TDT collections increases.   

The 2021-2022 year over year Bed Tax collections gains at Perdido Key were NOT driven by slick marketing for Perdido Key that Visit Pensacola placed.  These increases were organic, primarily due to the growth in new units coming on the market in Perdido Key via VRBO, AirBnB, Expedia, and other online owner-operated lodging solutions--in addition to work the Perdido Key Chamber did, in addition to the work Visit Pensacola did, in addition to the work Alabama state-line chambers did.

And I have the information to prove this,  information from the clerk.

I reached out to staff from the clerk's office for data on the number of unique, individual collectors in the 32507 (Perdido Key) Zip code to see what was driving this huge jump in gross-dollar TDT collections.  

The metric has only been tracked since late 2021--but the pattern is obvious;  there are a huge number of new rental units (TDT collectors) coming online in Perdido Key, and that is driving the increase year over year--it is obvious to the most casual observer.  Now, If the number of available units had held static and the gain was 52% that would point to something dramatic happening in terms of marketing and this conversation would not be happening.  But that is not what the story tells.  

Look at just 5 months side by side  to see the reason why the gains are occurring (month on top, total number of unique collectors on the bottom):

  










In just those 5 months compared, above, the available units jumped by 90% year over year--yet collections did not match growth and were "only" up 52%.  What does that mean?

There are ongoing conversations to improve this situation, I have discussed the issue with no real resolution at yesterday's TDC board meeting, where I informed that board I'd be bringing this issue to the BCC for discussion at an upcoming BCC meeting to work toward a better situation between Visit and Perdido Key to fix some of these untenable issues.  Naturally, any sort of a change to the current status quo has, is, and will be running into a buzz saw of opposition from hoteliers, advertisers, and others who are quite comfortable with the current state of things.  I happen to believe some minor tweaks and some autonomy for Perdido Key can fix things.  Unfortunately, a meeting on this topic I facilitated and attended last week produced no meaningful solutions going forward.

So I'll keep working on it from my end and through the BCC at the next meeting.









7 comments:

Phil Brown said...

Thank you Jeff for keeping our Perdido Key Chamber of Commerce at the forefront. We appreciate your work on this important subject. Phil Brown

Warren said...

Thankfully there were some great comments from other TDC members with some real actionable ideas. The ideas would result in immediate progress in the relationship between the Perdido Key Chamber and Visit Pensacola.
The first suggestion was to encourage a direct communication between the Chamber and Visit. All meetings are public and open to Perdido Key stakeholders. There are also public marketing planning meetings before any plan goes into effect which is another great avenue for open communication. Visit also committed to plan private meetings with the chamber to allow for an additional opportunity to make progress and open discussion.
The second comment echoed the general feeling that every area in Pensacola is unique and could take similar positions that they also require unique marketing. The reality is the marketing for Pensacola is very diverse and encompasses beach life, city, art, culture and history to name a few areas. By consolidating the buying power for Pensacola marketing, return on the dollars spent is exceptional. Based on actual results and a true understanding of the role Visit Pensacola plays, it does not make sense to pull the rug out from under an already successful team simply because there is a communication problem and a need for some additional training.
Real progress will be quickly realized if the parties that have concerns decide to directly communicate those needs during the many public meetings that steer the plans of Visit Pensacola.

--Warren Sonnen
O'Riley's Irish Pub
O'Riley's Uptown Tavern
Mugs & Jugs
Sir Richard's

Anonymous said...

Thus was done once before. Perdido Area Chamber proved beyond a shadow of a doubt to have made a BETTER RETURN on the TDC funds than Visit did.
Debbie Waters has a tremendous background on all.

Mel Pino said...

The first time I was shown a generic picture of a beachfront with a dull neutral "Come Enjoy Pensacola Beaches" (or something to that effect) I went yep, that's going to drive people to Pensacola Beach rather than Perdido Key.

Why? Because if you plug any of these neutral slogans into google, the search results are maximized for Pensacola Beach, Quietwater, and--no kidding--Opal Beach. I even got a hit for the question "What is the clearest water at any Pensacola Beaches" and when I clicked on it, was redirected to--you guessed it--a marketing page for Opal Beach.

Google search optimization is some of the lowest lying fruit in terms of marketing strategy and has been around forever. Of all the hits I got, there was only one--one--on the first page of results that had the words "Perdido Key," and that was from an official Visit marketing page.

And think about this: how many more thousands of times have I typed "Perdido Key" into my devices than "Pensacola Beach"? The only time I was ever really on search engines about the Beach was back in the roundabout days.

And yet still, my Google results hammer home on the various named locations on Pensacola Beach and Opal Beach. No Perdido. Far as google is concerned, it really is lost.

Alice Neal said...

If Google (or any other search engine) is sending people AWAY from Perdido, I'm okay with that. At least until Doug Ford gets a traffic light. lol

Tom Jardine said...

I believe that a significant portion of the great citizens of Escambia County share Alice Neal’s sentiments - I certainly agree with Alice.

Escambia County has a long, sad history of selling out to industry at the expense of our citizens. Today, we are selling out to the tourism industry.

The benefits that the citizens receive from tourism are insufficient to justify the enormous sacrifices that the citizens are asked to make in support of tourism.

For example; the great citizens of Escambia County have sacrificed our most valuable real estate in support of tourism. Drive onto Pensacola Beach and you will immediately recognize that sad truth.

And not all of our real estate was sold at fair market value. For example; in November 2022, Escambia County sold Innisfree Hotels a 2755 square foot previously unleased Casino Beach property for $8,500 in order to facilitate a new 12 story private tower at 2 Via de Luna immediately east of Crabs.

We will soon have five new enormous private towers on Pensacola Beach. Clearly, we were misled when we were told that the lease system restricts private development on our beaches.

Every additional tourist puts an additional burden on both our infrastructure and on our environment. The citizens bear the majority of those costs.

For example; we have record tourism numbers, but our Bob Sikes Bridge will soon be in need of replacement and we don’t have the funds. We have used the toll bridge revenues to widen Via de Luna to five lanes in order to accommodate the tourism industry.

On average, we currently discharge 1 million gallons of effluent directly into the Santa Rosa Sound each and every day.

Additionally, we discharge all of our storm water directly into the Santa Rosa Sound. But we are not striving to mitigate those environmental impacts and we continue to spend lavishly on advertising in order to attract even bigger crowds.

Rather than reinvest in our infrastructure and our environment, our record annual $21.8 million dollars in bed tax is being plowed into tourism advertising in order to attract even more tourists - each of whom will of course put further demands on our infrastructure and on our environment. And that traffic and those crowds further erode our quality of life.

We definitely should participate in tourism, but we should manage our tourism in a manner that will maximize the long term benefits of every Escambia County citizen.

In my view, Escambia County is selling out to the tourism industry at the expense of our citizens.

Tom Jardine said...

Jeff is correct; we need to spread our $21.8 million in bed taxes throughout Escambia County. The Florida Auditor General’s recommendation that Escambia County designate all of our public waterways as Nature Centers would help us to achieve that objective. It’s unfortunate that the power brokers in Escambia County are rejecting the Auditor General’s recommendation.

We have set up a confusing hierarchy that controls the citizens’ tax revenues. The members of our Tourist Development Council are not elected by the citizens of Escambia County and the same people seem to be reappointed every four years.

The TDC relays the citizens’ tax dollars to a second agency: Visit Pensacola. The members of Visit Pensacola were not elected by the citizens either. And citizen input is not welcomed at Visit Pensacola’s meetings. I’m not certain that they are even a government agency. We should impose upon them a fiduciary duty to our citizens.

And why is that organization named Visit PENSACOLA? The citizens’ tax revenues should be used to benefit all of our citizens throughout Escambia County.

Our bed taxes belong to the citizens of Escambia County, but the citizens don’t seem to have any say as to how those revenues are spent.

We have record bed tax revenues, but the citizens don’t seem to be benefiting.