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Orlando Area Hotels Generate a Whopping 23% Increase
 in Occupancy Taxes for March 2004 Compared
 to Previous Year
By Jerry W. Jackson, The Orlando Sentinel, Fla.
Knight Ridder/Tribune Business News

May 4, 2004 - Central Florida's reviving tourism industry is off to its best start on record, with resort-tax collections in Orange County hitting an all-time high of $12.17 million in March alone.

But bad news from across the globe could conspire to slow the breakneck pace, and industry watchers are cautious on the eve of what could be a red-hot summer.

"It's significant from a feel-good standpoint," Orange County Comptroller Martha Haynie said Monday. "It seems to me we are coming back a little sooner than we thought. That's good news."

Revenues from the 5 percent tax on hotel rooms and other short-term rentals was 23 percent higher in March than in the same month a year ago, when the war in Iraq was blamed for an 8.5 percent plunge in collections, Haynie said.

Haynie said that while the comparison to a weak March 2003 takes away some of the punch, the growth is still a positive sign -- and the eighth straight month for a year-over-year increase.

"Anecdotally, things are looking decent at the hotels and Disney right now despite the bad news out of the war," Haynie said.

The tourist development tax edged past the previous all-time monthly high of $12.14 million, set in March 2000. March historically is a strong month for hotel-tax collections, Haynie said.

Through the first three months of the calendar year, the resort tax is on a record pace, generating more than $1 million more than the peak year of 2000.

Hotel operators are clearly pleased with the continued growth in industry revenue, said Richard Maladecki, president of the Central Florida Hotel & Lodging Association. He said the rebound is "a reflection of our economic comeback."

Travel specialists say the June-through-September summer vacation stretch is looking strong, and Orlando is a leader.

"Orlando is our top destination for summer travel this year, as far as reservations made to date," said Kendra Thornton, a spokeswoman for Orbitz, the online travel seller in Chicago.

What's driving the increase, Thornton said, is the rebounding economy, a variety of travel deals on the Internet and a generally more stable travel environment.

"People are less fearful than this time last year, when the war was going on," Thornton said. "Plus, the economy is stronger."

In addition to the boost in leisure travel as a result of the strengthening national economy, the Orange County Convention Center also had a record attendance in the first three months of this year, helping boost adhotel demand.

Osceola and other Central Florida counties are posting resort-tax increases as well but not the dramatic double-digit gains seen in Orange County. Osceola, for example, saw its bed tax rise 5.5 percent in January and 7.4 percent in February, while Orange's rose 16 percent and 25 percent for those respective months.

Other reports bear out the ongoing rebound. The Orlando market, with more than 116,000 rooms, posted healthy increases in both occupancy and average room rates in March, according to a survey by Smith Travel Research. Occupancy soared 12.4 percent to 78.9 percent, and room rates rose 6.3 percent to $98.57.

Year-to date, Orlando's revenue-per-available room, a key measure of industry health, was up 18 percent to $70.52, more than double the national average increase.

"All the indicators are positive and pointing to a strong summer," said Peter Ricci, assistant professor at the University of Central Florida's Rosen School of Hospitality Management. Even with the recent run-up in gasoline prices, area hotel general managers are reporting strong bookings for May and June, said Ricci, who teaches hotel management.

"Growth year over year is very good, and even compared with our banner year of 2000 it's looking good," Ricci said. But despite that, he said it's too early to declare the industry's recovery is here to stay.

"The problem is we're so vulnerable to any major incident," Ricci said, from a major terrorist attack to a return of SARS, severe acute respiratory syndrome.

Just last week, China announced its first death of the year from SARS, but authorities in China have been quick to trace and quarantine people who may have contracted the pneumonia-like disease from a research laboratory.

Last year, the disease killed 349 people in China and 774 worldwide, raising fears of a widespread outbreak and contributing to a slowdown in global travel.

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(c) 2004. Distributed by Knight Ridder/Tribune Business News. ORBZ,

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