the Bed Tax as More then 2,400 Hotel Rooms Go Condo
|By Steve Sanoski, Florida Keys Keynoter,
Knight Ridder/Tribune Business News
Jun. 21, 2006 - The total number of condominium conversion
projects in the pipeline in Monroe County has risen to nearly 40,
encompassing more than 2,400 rooms throughout Monroe County. This
number was revealed as the Monroe County Tourist Development Council
released its updated study of condominium conversions aimed at better
understanding how the increasing number of condos is affecting Keys
tourists, coffers and industries.
This steady increase of planned condo hotels in the Keys does
not surprise TDC researchers. "I'm not surprised because a third of all
development in hotels across the country right now include condo
development," market research director Jessica Bennett explained.
"We're seeing a mirroring of what the industry is experiencing across
One objective of the updated study was to identify condo
projects that have been approved since the August 2005 release of the
initial overview, she said. A total of six new projects and 421 beds
are now in what is referred to as the pipeline - the total number of
buildings and rooms slated for condo reconstruction.
It's not the rapid growth of condo-hotels in the Keys that
worries the Lodging Association of the Florida Keys and Key West. That
group's anticipated that for years. However, the association is
concerned about the process by which bed taxes will be collected from
the structures. Such taxes are collected from tourists on a per-night
"Our primary concern is to see the county and city establish,
ahead of time, how bed-tax dollars are to be collected," said Jodi
Weinhofer, president of the group. "You're going to have a very
different situation that could be very difficult to properly organize
if we don't put a plan in place now."
Included in the updated report is bed-tax collection findings
from recently constructed and fully operating condo-hotels located in
Hawaii. The Hawaii Tourism Authority Condominium Conversion Report
suggests an initial loss of $2.1 million in bed taxes overall in 2004.
Whether the findings in Hawaii have any comparative merit to the Keys
condo-hotel phenomenon is uncertain, however, Bennett speculates bed
taxes could initially be off slightly in the Keys as more condo-hotels
"They're undergoing the same thing as us, and during their
first year they did lose out on bed taxes," she said. "But in the long
run, their numbers are back to the positive side. We're anticipating
that bed taxes could be flatter initially, just because there are fewer
units online during the construction. But if that happens, we would
then anticipate those numbers to come back up."
Beyond speculating about what may happen, Weinhofer is most
interested in taking a proactive approach in developing methods to
adequately account for all the unique bed-tax situations presented by
the operation of a condo-hotel. "We're pushing to make sure there's a
plan in place - how bed taxes are tracked and who is tracking them,"
"It's too much money to not pay attention to it. We're in a
unique position in that our state allows us to collect and use bed
taxes to benefit our tourists as well as our residents, and so we have
to make sure they're collected and used appropriately."
All told, the updated version of the impact study on
condominium conversions in the Keys provides few surprises for the
majority of political, residential, development and business
communities involved. The biggest surprise of the updated study has
nothing to do with condos or hotels at all, Bennett said. It has to do
with the visitor profile survey associated with the study. "One thing
that really stood out for us was something we found out through the
repeated visitor survey," Bennett said. "We knew we'd have a lot of
families vacationing in the Keys over the summer, when the kids are out
of school. But surprisingly, those numbers have been high all year."
The next update on the study of the impact of condominium conversions to the Florida Keys is due in three months, and should be available to the public shortly after. Copies of the most recently updated study can be obtained by contacting the TDC at (800) 648-5510.
Copyright (c) 2006, Florida Keys Keynoter, Marathon
Distributed by Knight Ridder/Tribune Business News. For reprints, email email@example.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.