Concerns have been raised as to whether the ever-increasing number of short-term holiday rentals is contributing to the housing problem in the district.
West Palm Beach – Sunfest, Spring Training, GreenMarket and Cityplace
Some of the things that make West Palm Beach great include the Kravis Center, Meyer Ampitheater, Sunfest and Ballpark of the Palm Beaches
- Palm Beach County’s booming tourism economy is generating record revenues from lodging taxes.
- The current fiscal year, which ends on September 30, is on track to reach a new record.
- Due to the demand for rooms, hotel operators were able to increase their daily prices.
Palm Beach County’s booming tourism economy generates record lodging tax revenues, ensuring the county has enough money to pay off the convention center and baseball stadium bonds on time, maintain the beaches and market the region as a premier destination.
With the tourism industry hit hard by COVID in 2020, bed tax revenues fell to $43.3 million, a crushing drop of more than 20% from pre-COVID 2019. But the industry has now fully recovered, setting a bed tax record in fiscal year 2022 when nearly $78 million was collected, and a new record was reached in 2023 at $84.2 million, nearly double the COVID numbers.
The current fiscal year, which ends Sept. 30, is on track to set a new record, with revenue expected to be $87 million. More than 9.5 million tourists visited Palm Beach County in fiscal year 2023, and more than 2,000 hotel rooms have been added to the county’s inventory since 2019.
“Tourism has always been an important part of the country’s economy,” said Emanuel Perry, executive director of the Tourist Development Council (TDC), which oversees the bed tax program. “We faced unprecedented challenges with COVID, but we have fully recovered and then some.”
How does a tourist tax work in Palm Beach County?
Tourists pay a 6% lodging tax on overnight stays of less than six months, including stays in hotels, condominiums, guest houses, RV parks and mobile home parks.
One-third of the bed tax funds will be used to pay off debt at the county’s two baseball stadiums (Roger Dean Chevrolet Stadium in Jupiter and CACTI Park of the Palm Beaches in West Palm Beach) and the Palm Beach County Convention Center. The remainder will be used to promote tourism through Discover the Palm Beaches, the county’s tourism marketing agency.
The bed tax also funds beach restoration, cultural and arts programs, the film commission and major sporting events. Perry said the purpose of the bed tax is to make Palm Beach County “a globally recognized destination that all travelers want to visit for its cultural lifestyle and amenities.”
To further boost tourism in the coming years, a tourism master plan is currently being developed to identify additional attractions and is expected to be completed next year.
The tourism tax was introduced in Palm Beach County in 1982 at 1%.
The tourism tax was first levied in 1982 at a rate of 1%. It was gradually increased until it reached 6% in 2015, the maximum amount allowed by law. Only 10 other Florida counties levy a 6% lodging tax. Since the 6% rate was implemented in 2015, the amount collected has more than doubled.
Demand for rooms has allowed hotel operators to increase daily rates, which averaged $246 in fiscal year 2023, up 37% from the pre-COVID year of 2019. Hotel revenues have grown to $1.2 billion, up 47% from fiscal year 2019. Room nights totaled 4.8 million, up 10%, and off-hotel revenue has nearly tripled since 2019, now at $228 million.
Much of the overnight stay is driven by the county’s two minor league baseball facilities. The Miami Marlins and St. Louis Cardinals train at Roger Dean; the Houston Astros and Washington Nationals train at CACTI Park, making Palm Beach County one of Florida’s spring training destinations. Minor league teams also play in Jupiter.
Palm Beach County hosted one of four spring training games in Florida during Major League Baseball’s 2023 spring training season. According to an economic impact report prepared for the county’s sports commission, more than 237,000 people attended spring training games at the two stadiums, and more than half of those were nonresidents. The spring training games alone accounted for 55,300 room nights. Houston, St. Louis and Washington are major travel markets for Florida.
The two ballparks are used for numerous amateur baseball events throughout the year. The multi-purpose fields are also used for soccer, lacrosse, rugby, field hockey, flag and tackle football. In fiscal year 2023, nearly 200 sporting events generated more than 300,000 room nights, representing about 10% of all room nights sold that year. According to the Sports Commission, the events are responsible for bringing nearly one million sports visitors to Palm Beach County, staying in hotels, using county facilities and visiting area restaurants.
Can too much tourism be negative?
Several European destinations are struggling with overtourism. There is opposition to tourism in Barcelona, Spain, and Amsterdam, Netherlands. In both cities, protesters are concerned about the impact of tourism on housing affordability.
In Barcelona, protesters recently fired water pistols at unsuspecting tourists and chased them out of outdoor restaurants, chanting “tourists, go home” and demanding a halt to short-term rentals. Amsterdam is planning to ban cruise ships as part of a “stay away” campaign; Venice did so in 2021.
Could that happen here? Probably not, says Ken H. Johnson, a real estate economist at Florida Atlantic University, but it’s something to watch closely.
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“There is no doubt,” he said, “that short-term rentals such as those offered on Airbnb and similar sites are keeping housing out of an already depleted housing stock. There are so many fewer apartments available for rent for our year-round residents. As a state, we must recognize that the current rental crisis is hurting our economic growth potential and making it increasingly difficult for service workers to live within reasonable distance of their jobs.”
A check of the vacation rental website VRBO on Aug. 2 found that nearly 6,000 units were available for rent in Palm Beach County in December. The owner of a two-bedroom unit was asking $10,000 for the month of December 2024.
Johnson said that in many cases it makes more sense for an owner to rent short-term rather than year-round, but with the economy shrinking, he believes more rental properties will return to the year-round market.
Perry said Palm Beach County is far from the “overtourism” prevalent in Europe, but added, “We need to find a balance that attracts visitors while enriching the lives of our residents. The purpose of the master plan is to identify attractions that will not impact our residents.”
Looking ahead, Perry said the 2025 fiscal year may be flat, but he expects a very strong 2026 as the county will benefit from World Cup matches at Hard Rock Stadium, which will host seven soccer events, including the bronze medal final.
Mike Diamond is a journalist at The Palm Beach PostPart of the USA TODAY Florida Network. He covers Palm Beach County government. You can reach him at [email protected]. Support local journalism. Subscribe today.
