Story Highlights
- Visit Orlando's audit raises questions about tourist tax fund usage.
- Orange County leaders will review Visit Orlando's annual update Aug. 26.
- Experts caution against diverting tourism funds to other needs.
Orange County leaders will receive Visit Orlando's annual update Aug. 26 — something the local tourism business community will watch closely.
The presentation is expected to include discussion of the agency’s recent audit, which raised questions about how its share of tourist development tax (TDT) funds are used.
The audit, released July 29, examined Visit Orlando’s spending practices and fund categorization. It prompted calls for emergency sessions from some county leaders, though those discussions were postponed until the upcoming Aug. 26 Board of County Commissioners meeting.
Tourist tax use under scrutiny
The audit also once again may put a focus on the tax and its overall usage.
Florida law mandates that at least 40% of hotel tax collections be used for tourism promotion and advertising before funds can be allocated to other uses like convention centers, museums or stadiums. However, some local business leaders and officials argue the tax should support broader needs such as roads and public infrastructure.
Despite the push for flexibility, experts caution against diverting tourism funds.
“If you cut budgets for state tourism money, you potentially have to lay off people. How are you going to do more with less?” said Jason Draper, professor at the University of Houston’s Hilton Hospitality College who has past experience as a research manager for Chicago’s Convention & Tourism Bureau.
Draper said he has seen government officials transfer public funds from tourism budgets toward other necessities such as health care or education, but he warned it could have some potential downsides, such as seeing a fall-off in tourism if less money is used to promote the industry.
Conventions drive Orlando’s economic impact
Draper emphasized the importance of destination marketing agencies like Visit Orlando in attracting conventions and trade shows, which are big business in the City Beautiful.
“You can’t just build [a convention center] and expect events to show up,” he said. Visit Orlando staff coordinate with hotels, transportation providers and meeting planners to bring major events to the region, he added. “You have to sell the city and work with the meeting planners.”
In 2024, the Orange County Convention Center, which is undergoing a $560 million expansion to accommodate future growth, generated more than $3 billion in economic impact, a number expected to grow.
Other states explore flexible hotel tax models
Meanwhile, the uses of the tax can be more flexible, as seen in other areas of the country, said another expert.
Rachel Fu, director of the Eric Friedheim Tourism Institute at the University of Florida, pointed to Colorado’s new legislation allowing voters to raise hotel taxes and use the revenue for public safety and infrastructure. That legislation, signed into law in May, allows voters to increase their lodging tax from 2% to 6% for the additional uses.
She also cited Illinois, where hotel taxes in cities like Chicago reach 17%, with funds distributed among state, county and city governments. “Some states keep these taxes locked into tourism-related expenditures, whereas others distribute the funds for general government services or specific projects like roads, parks or convention venues. The approach depends on each state’s laws and the political influence of the tourism industry in shaping those laws."
Tourism’s local impact and challenges
Fu noted that one in three jobs in Orlando is tied to the tourism industry, but tourists also contribute to traffic congestion, wear and tear on roads and higher housing costs. That's why some parts of the country use tourist taxes to invest in infrastructure.
“People love the opportunities and vibrancy tourism brings, but they also want to make sure it works for them, not just for tourists or the tourism industry. That ambivalence is common in major tourist destinations around the world, not just in Orlando."
Draper and Fu, whom both had experience with tourism bureaus, declined to comment on the findings of the Visit Orlando audit.
Visit Orlando’s budget and tax share
Orange County’s tourist development tax, levied on hotel, motel and short- term lodging stays, benefits from the region’s 75 million-plus annual visitors.
- In fiscal-year 2025 through June, the county collected $300 million in hotel taxes.
- Visit Orlando receives 30% of the county's TDT funds, which supported a $105 million budget in 2023. This funding structure has drawn scrutiny in the past.
Visit Orlando responds to audit findings
Visit Orlando CEO Cassandra Matej acknowledged the audit’s recommendations and expressed optimism about future improvements.
"Our work never stops," she said. "Visitation starts at zero every January, and global competition is fierce. History has shown that pulling back on tourism marketing can have devastating, long-term impacts.”
Matej emphasized the agency’s commitment to driving tourism and supporting Central Florida’s economy. "Orlando is not just competing with other cities, but with entire states and countries. That’s why continued investment in programs that drive visitation is essential for sustaining and growing an industry that serves as an economic engine for Central Florida."