Florida's Space Coast Tourism Journal - 2023 by Florida's Space Coast

SPACE COAST TDT: TRENDS, NOWCASTING & FORECASTING SPACE COAST

VISITOR STUDY

RENOVATING LORI WILSON PARK 2023

1 061ÿ73456 0 7 8ÿ 896 3 96 2

VisitSpaceCoast.com

VisitSpaceCoast.com |

VisitSpaceCoast.com

TABLE OF CONTENTS Letter from the Executive Director

Meet the Team

Research

ESpace Coast

18 Visitor Study Renovating Lori Wilson Park

Caring for Coastlines & Creating Memories

Brand Awareness 46 Space Coast TDT: 52 Trends, Nowcasting & Forecasting

Florida’s Space Coast Office of Tourism 150 Cocoa Isles Blvd., Suite #401 Cocoa Beach, FL 32931 Phone: (877) 57-BEACH (2-3224) (321) 433-4470 Fax: (321) 433-4476 The Tourism Journal is the official tourism intelligence magazine of the Florida’s Space Coast Office of Tourism

A LETTER FROM

THE EXECUTIVE DIRECTOR This year’s Tourism Journal marks the 6th year for these publications and the 9th issue. The purpose of the Tourism Journal is to provide analytics on how we measure success, as well as providing summaries of tourism-driven impactful projects that have occurred. This year features some significant milestones as we break the record for Tourist Development Tax (TDT) collections for the 3rd straight year since the pandemic. Additionally, this issue features an analysis of TDT and some methodologies for doing short-and long-term projections. We have expanded the number of articles to six for this issue. Each article offers valuable insights on a variety of tourism topics and impacts on the Space Coast. One key story breaks down how we analyze our marketing programs and the tools we use to determine how our marketing campaigns are working. We also provide a major update on our visitor spending analytics from Downs & St. Germain Research. This hasn’t been updated since 2019 and

provides for some interesting insight into what visitors spend their money on when they come to the Space Coast and further looks at what activities they engage in while they are here. There is also a summary story of our brand awareness research which is also conducted by Downs & St. Germain Research. A story on Lori Wilson Park, where $4 million of tourism tax funds were spent to refurbish the park, including new crossovers, boardwalks, bathrooms, showers, and dog park. And finally, a fascinating story about a new robot that can be seen on Space Coast beaches keeping things clean! Regarding the TDT record numbers this year, we hit $25.6 million which is a new milestone. In 2019, we were excited to crack the $16 million mark, but of course that number took a steep dive in 2020 when the pandemic hit, dropping to $13 million. Since then, we saw a record in 2021, hitting nearly $17 million and in 2022, hitting

FY 2022-23 TOURIST DEVELOPMENT TAX COLLECTIONS

October November December January February March April May June July August September TOTAL 6

Actual

Budget

Diff - Amount

Diff - %

2021-22

Diff - %

$1,788,618 $1,740,499 $1,879,027 $2,340,447 $2,680,018 $3,172,953 $2,415,540 $1,945,253 $2,226,025 $2,213,881 $1,706,300 $1,431,628 $25,540,189

$1,700,000 $1,700,000 $1,800,000 $1,800,000 $1,800,000 $2,500,000 $2,100,000 $1,800,000 $1,900,000 $2,200,000 $1,500,000 $1,200,000 $22,000,000

$88,618 $40,499 $79,027 $540,447 $880,018 $672,953 $315,540 $145,253 $326,025 $13,881 $206,300 $231,628 $3,540,189

5% 2% 4% 30% 49% 27% 15% 8% 17% 1% 14% 19% 16%

$1,465,815 $1,360,975 $1,564,088 $1,860,020 $2,297,667 $2,797,100 $2,273,631 $1,978,845 $2,045,179 $2,275,588 $1,822,844 $1,589,352 $23,331,104

22.0% 27.9% 20.1% 25.8% 16.6% 13.4% 6.2% -1.7% 8.8% -2.7% -6.4% -9.9% 9.5%

VisitSpaceCoast.com

$23.3 million. The real question will be are these growth numbers sustainable, or will we see slower growth going forward? See the chart on the prior page for breakdown of the FY 2022-23 TDT data. Tourist Development Tax (TDT) collections have come in at $25.54 million for Fiscal Year (FY) 2022-23 which is 9.5% ahead of FY 2021-22’s previous high of $23.33 million. This equates to $511 million in total lodging revenue. In spite of seeing some softening the last few months (down 5.4% for the 3rd quarter), this is an all-time record – the highest point in TDT history. In fact, looking at it seasonally, we had the best fall, best spring and best summer seasons we have ever had in terms of TDT collections – which represents 5% of total lodging revenue in the County. Looking at TDT by type, hotels represented 66% of the total. Year-to-date (YTD) hotels were up 8.1% in terms of revenue, collecting $16.8 million which equates to $336 million

in total revenue. Vacation rentals were at 33% of TDT for the year and increased 12.2% for the year with $8.4 million in TDT and $168 million in total revenue. In terms of hotel/motel revenue by city, Cocoa Beach and Cape Canaveral were at 34% of the total and generated $8.6 million this year which is $172 million in total revenue, up 12.3%. Melbourne and the Beaches were at 28% as a percentage of the total and generated $7.1 million for the year which is $141 million in total revenue, up 4.3%. Looking at the data below, you can see each month’s numbers and how we did against prior year. The last 4 out of 5 months fell below the prior year’s number. We will be monitoring this very closely as we go through the fall and see where TDT may end up this year.

PETER CRANIS SPACE COAST OFFICE OF TOURISM

VisitSpaceCoast.com

MEET THE TEAM PETER CRANIS Executive Director

MEAGAN HAPPEL

Public Relations Manager & Film Commissioner

JOSHUA HOWELL Research Intern

ALYSSA SERRES

Tourism Content Coordinator

DEBORAH WEBSTER

Research & Analytics Director

VisitSpaceCoast.com

Contributors Joseph St. Germain, Ph.D. Downs & St. Germain Research Pages 18 & 46 Mike Slotkin, Ph.D. Florida Tech Page 52 Stella Maris Environment Research Photo Credit Page 40

VisitSpaceCoast.com

Sources Port Canaveral Photo Credit Pages 12 & 26 Ryan Hayden Research Intern January - June 2023 Page 40 Thank you - Brevard Zoo & Melbourne Orlando International Airport for sharing data Page 10

RESEARCH SUCCESSFUL MEASUREMENT OF ADVERTISING BY PETER CRANIS

Background Previous Methods of Tracking In the golden age of advertising (not so long ago), there was a limited way of knowing if your advertising was working. Measurements like Click Throughs of digital ads and Completion Rates for video were the primary measurements of digital advertising. As far as television, radio, or billboard advertising, advertisers relied on consumer awareness studies, or looked at ratings on TV and radio. But, those methods did not get to the heart of the matter which is “did people take action/buy something as a result of seeing advertising”. In today’s age, it is a new era and there are a multitude of ways people can determine if an action is taken after seeing an ad – one example is an attribution model that looks at people’s actual behavior to see if causality can be claimed. While some of these methods are quite interesting and provide for some good analysis, each has its weaknesses and strengths.

We will take a look at a variety of methods of tracking that are currently being used. Many of these methods have to do with the tracking of electronic devices such as computers and smart phones. Also, many rely on having spending data about individuals – what do people spend on average when they are traveling, etc.

Adara Bookings by Source Market, Using Visitor Spending Data Adara is a company that has a very interesting model, particularly for destinations trying to track what advertising influences consumers to book a vacation. Using tracking pixels, they are able to follow the behavior of individuals (without violating privacy rules) after they have viewed a TV commercial via cable or streaming services, or track behavior after someone has clicked on a digital ad. The Adara pixel follows the person’s device and can tell if they searched or booked a hotel or airplane ticket.

VisitSpaceCoast.com

Many of the top reservation services, hotel companies, and airlines provide data to Adara so they can do this. In 2022, the Space Coast Office of Tourism ran $3.24 million in advertising that had the tracking pixel on it and found it generated about $125.77 million in visitor spending based on the air and hotel bookings we observed. In order to calculate the Return on Investment (ROI), we divide the visitor spending by the advertising spend. We have done extensive research on visitor spending over the years and are able to use our primary visitor spending data for a true ROI. (Learn more about our actual visitor spending research on page 18). The ROI on this spending was 39:1. To get to the visitor spending information*, we have to survey many people which we have done again and again. We found the average spending is $1,291 per travel party, or $469 per person. The average length of stay in our destination is 4.5 nights so that equates to $104 per person per night, or $287 per party per 12

VisitSpaceCoast.com

night. When we get booking information from Adara, we get the number of room nights booked which allows us to use these spending multipliers (number of bookings X the number of nights X the spending per party per night). We can also do the same for an airplane ticket (1 booking X the average round trip days X the spending per person per night). For the air component since most of our visitors fly into Orlando, we had to use a percentage of the total – for instance for Chicago, New York, or other northern markets we may have only counted 25% of the traffic, while for Atlanta, Charlotte, or markets that had direct service into Melbourne, we may have used 75% or even 100% in some cases. Additionally, we can look at each source market and see what was generated out of each. Interestingly, the farther away people are from our area, the higher the ROI, most likely due to people staying longer and spending more when they travel from farther away. This information helps

inform our marketing plans and lets us allocate funds in an appropriate manner. We try to look at aggregate data and not get fooled when one particular market does really well. For instance, you might say Pittsburgh is doing very well at a $350:1 ROI, but you have to take into account we are not doing a full media campaign there so our advertising spend is much lower. Also, we have direct air service out of Pittsburgh, so that impacts the ROI. But, overall, we can see where we are doing well and adjust accordingly by shifting money in and out of certain markets.

Adara Cruise Campaign Looking at Hotel Bookings This was a very interesting and important analysis using Adara pixels on our cruise advertising in 2022. The purpose of our cruise advertising is to generate hotel stays before or after a cruise. By looking at the Adara tag we were able to see that the advertising we were running was indeed generating room nights. It is interesting to note that we were using digital ads that were designed to target people who were likely to be taking a cruise (for instance, those that were searching for cruise information within Google). Using two key partners to target these consumers – Sojern and Travel Spike – both were able to pinpoint people likely to take a cruise. As a result of spending approximately $227,000 we were able to generate over 28 million impressions resulting in more than 31,000 clicks

on our ads. Those then resulted in 15,269 hotel bookings/33,592 room nights. Using the average length of stay of 2.2 nights, it resulted in more than $9.6 million in visitor spending (Number of Bookings X 2.2 X $287). The ROI (visitor spending divided by advertising spend) was 42:1.

iHeart Looking at Visitation Data via Cellular Devices, Applying Visitor Spending iHeart is another partner that has a unique way of tracking advertising results. As the top provider of radio programming (including podcasts), they have their own app that people use to stream various kinds of content. And while you could argue that this type of marketing is “top of funnel”, meaning it is primarily an awareness type of advertising, they can track their audience using data from their own apps and digital network. Through this data, iHeart is able to report how many people came into an area after hearing ads that ran on their network. In 2022, we spent $177,000 on advertising with them and they tracked 1,350 people that came into our destination. Using our visitor spending data of $469 per person that equated to over $256,000 in visitor spending. And while the ROI might not seem that great, it is important to remember that awareness building is also a key element of any advertising initiative.

VisitSpaceCoast.com

Expedia

Sojern

Bookings, Applying Visitor Spending Expedia is a great partner from a measurement perspective. Because they are an actual booking engine, they are “lower funnel”, meaning people are in a buying mode when they go to their website, and they are able to provide actual booking data. In 2022, we spent nearly $304,000 with Expedia and they were able to track exactly how many hotel room nights were booked by the people who saw our ads – which was nearly 14,600 nights. Using the visitor spending data of $1,291 per travel party, divided by 4.5 (average length of stay), we get a multiplier of $287 per room night which equated to nearly $4.2 million in visitor spending – an ROI of 14:1. Additionally, we ran a cruise campaign with Expedia and between October, 2022 and April, 2023 we were able to generate 7,443 room nights on an advertising spend of $171,500 that resulted in over $3.4 million in visitor spending – or a 26:1 ROI.

Bookings, Applying Visitor Spending Sojern is another digital advertising company that can target travelers and report on bookings that are done as a result of advertising. From January 16, 2023 – April 18, 2023 we ran 2 different campaigns – one focused on general visitation to our area and the other targeting people who are likely to take a cruise and then stay here. For the first group, we spent just under $128,000. That generated 650 hotel nights booked and 4,922 air bookings. The hotel bookings resulted in over $186,000 in visitor spending. The air bookings – assuming 25% would travel here (most flew into Orlando) – would result in visitor spending of nearly $372,000, resulting in a total of nearly $558,000 in spending. For the cruise campaign, we spent just under $114,000 and that generated 745 hotel nights, or $214,000 in visitor spending. It also generated nearly 5,000 flights booked and visitor spending of over $400,000 for a total of over $614,000 in visitor spending.

VisitSpaceCoast.com

Foursquare Visitation Via Apps, Applying Visitor Spending This is a similar system as Adara in that they have a tracking code that follows devices and looks at whether people have seen our ads, then tracks if it sees them in market. From October 1, 2022 – December 31, 2022 we added the Foursquare code to 6 digital partners’ ads. The tags identified nearly 235,000 visitors to our area among people who had seen at least one of our ads. Then Foursquare goes a step further and using a control group of people that didn’t see our ads, determines what percent of those people were incremental visitors – meaning they came because of our ads. They were only able to apply the algorithm to 3 of the 6 partners which represented about 100,000 visitors and it showed about 18% of those would not have come without seeing our ads, meaning they were influenced by our ads to visit here.

Arrivalist Visitation, Applying Visitor Spending This is also a new tracking tool that we have not actually used yet, but are in conversations with them. Their model is similar to others in that they tag advertising and then see if people have come into the destination

after seeing our ads. As with the others, it is a matter of learning from each source of data and determining if their model makes sense and is compatible with our goals.

Other Data Sources In addition to tracking views of digital ads and click throughs, we also can measure if someone clicked on our website after seeing an ad (nearly 1.4 million in 2022), requested a vacation guide (nearly 18,000), used our booking widget (nearly 23,000) and signed up for our email newsletter after seeing an ad (over 5,200). These unique actions are good indicators as to whether a consumer might travel to our area.

Many Sources of Data, One Goal At the end of the day, all of these tools provide some insight and lessons about our advertising. None of them are perfect, but compared to the way tracking was done previously, this is a great step forward. They will only get more sophisticated and accurate as they move forward and will allow us to make better marketing decisions based on their results. n *2019 data - updated visitor spending data can be found in the article beginning on page 18.

VisitSpaceCoast.com

TOURISM PERFORMANCE

SCORECARD FLORIDA’S SPACE COAST OFFICE OF TOURISM

Tourist Tax Collection Revenue BUDGETED

LAST YEAR

ACTUAL

$3M $2.5M $2.0M $1.5M $1.0M $500K $0

O22

N22

D22

J23

F23

M23

STR - Occupancy %

ACTUAL

LAST YEAR

ACTUAL

$200

80%

$175

60%

$150

40%

$125

20%

$100 O22 N22 D22 J23

F23 M23 A23 M23 J23

ACTUAL

J23 A23 S23 O23

J23

A23

S23

O23

LAST YEAR

O22 N22 D22 J23

F23 M23 A23 M23 J23

J23 A23 S23 O23

Total Attendance

& TREE TOP TREK

LAST YEAR ACTUAL

$200 $175 $150 $125 $100 $0

J23

STR - ADR

STR - RevPAR

M23

100%

A23

O22 N22 D22 J23

F23 M23 A23 M23 J23

VisitSpaceCoast.com

J23 A23 S23 O23

60,000 50,000 40,000 30,000 20,000 10,000 0

LAST YEAR

O22 N22 D22 J23

F23 M23 A23 M23 J23

J23 A23 S23 O23

Total Deplaned - Domestic

ACTUAL

$25,000 $22,500 $20,000 $17,500 $15,000 $12,500 $10,000 $7,500 $5,000 $2,500

Total Deplaned - International

LAST YEAR

ACTUAL

LAST YEAR

$20,000 $17,500 $15,000 $12,500 $10,000 $7,500 5,000 O22 N22 D22 J23 F23 M23 A23 M23 J23 J23 A23 S23 O23

Total Successful Launches

O22 N22 D22 J23 F23 M23 A23 M23 J23 J23 A23 S23 O23

Total App Downloads

ROCKET LAUNCHES ACTUAL

8 7 6 5 4 3 2 1

O22 N22 D22 J23

ACTUAL

F23 M23 A23 M23 J23

J23 A23 S23 O23

16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

O22 N22 D22 J23 F23 M23 A23 M23 J23 J23 A23 S23 O23

The Tourism Performance Scorecard is a collection of metrics to analyze trends by product, destination and season. We are grateful to our local business partners who shared data for this effort. VisitSpaceCoast.com

Space Coast Visitor

SPACE COAST VISITOR STUDY BY JOSEPH ST. GERMAIN, Ph.D.

Introduction Florida’s Space Coast is one of Florida’s top tourist destinations. Boasting attractions ranging from the Kennedy Space Center to Brevard Zoo to 72 miles of beautiful beaches, the Space Coast has something for visitors from all walks of life. But to maintain its success, it is imperative for the Space Coast Office of Tourism to understand its visitors. For that reason, in 2023, Downs & St. Germain Research and the Space Coast Office of Tourism collected survey data on over 2,000 visitors who came to the Space Coast and stayed overnight in an accommodation. This article will provide an overview of these visitors and their journey.

Method

Study

The goal of the data collection was to understand who visits the Space Coast, what they do during their trip, and how they feel about the experience afterwards. An online survey was distributed by the following methods to new and seasoned Space Coast visitors via: • QR codes at area hotels, attractions, and the airport • A pop-up on Space Coast’s website • Facebook ads targeting people that had previously visited the Space Coast Survey data were collected continuously from April through August 2023; data reflects trips taken from January to August 2023. A total of 2,013 surveys were collected. VisitSpaceCoast.com

While this is a small sample of all visitors to the area, the sample size is significant, resulting in small sampling error of only around 2.2%. This means the data can be extrapolated to a much larger audience – the entirety of the visitors the Space Coast received during that time period. Data collection for this project will continue through the end of 2023, at which point additional analyses will be completed to estimate the overall economic impact of tourism on the Space Coast.

The Visitor Journey This article will walk through the journey of a typical Space Coast visitor, including: 1) Pre-Visit planning, 2) Visitor Profile, 3) Trip Experience, and 4) Post-Trip Evaluation. After covering the overall visitor journey, it will focus specifically on visitors who took a cruise while enjoying the Space Coast. Pre-Visit Trip Planning Visitors used a variety of online sources to plan their trip to the Space Coast, particularly:

• VisitSpaceCoast.com (43%) • VisitFlorida.com (36%) • SpaceCoastLaunches.com (32%) • TripAdvisor (25%) The websites VisitSpaceCoast.com and SpaceCoastLaunches.com are operated by the tourism office. That being said, it should be noted that 1 in 4 visitors to the Space Coast did not use an online trip planning source to plan their trip to the area. These visitors may have used offline sources, like recommendations from friends and family or a travel agent. Alternatively, they may be personally familiar with the area. Marketing Recall To understand the efficacy and reach of Space Coast advertising, the survey also asked respondents about their recall of advertisements for the area, reference Figure 1. Two in three visitors (66%) recalled seeing marketing or advertising about the Space Coast in the six months prior to their visit. Of those, nearly half (49%) recalled seeing messaging in social

FIGURE 1. ADVERTISING SOURCES 10.0%

Social Media Video (Facebook, Instagram, Tik Tok, Pinterest) Website Social Media Other (Photograph or Post) Vacation Planner Billboard or Outdoor Advertisement TV (Streaming, Satellite, etc.) News Stories (TV, Online News or Newspaper Article) YouTube Magazine Print Ad Airport Display 10.0% Radio 3.0% Other None of the above 0.0% 20

VisitSpaceCoast.com

20.0%

30.0%

40.0%

50.0% 49.0%

36.0% 36.0% 29.0% 28.0% 27.0% 25.0% 19.0% 18.0% 17.0%

60.0%

media videos. Other commonly recalled sources included website advertisements (36%) and non-video social media posts (36%). Visitors also recalled seeing ads in vacation planners (29%), billboards or other outdoor ad sources (28%), TV (27%), and news stories (25%). In other words, Space Coast advertising successfully reaches a high percentage of potential visitors via a wide variety of sources. Visitor Profile Demographics Visitors to the Space Coast had a median age of 43, were largely Caucasian (76% of visitors), and reported an average annual household income of $108,000. As is typical for similar destinations, slightly more females took the survey than males, but the overall demographic is close to 50/50. Transportation The Space Coast attracts visitors from both near and far. Nearly half of survey respondents (45%) drove to the area, while the rest (55%) flew into one of the following three airports: Orlando International Airport (29% of all visitors), Melbourne Orlando International Airport (19%), or Orlando Sanford International Airport (7%). FIGURE 2. ORIGIN MARKETS 4%

12% 37%

13%

17% 18%

Florida Northeast

Southeast Midwest

Midwest Int’l

Origin Market Two in five visitors to the Space Coast come from the state of Florida (37%). Out-of-state visitors most commonly live elsewhere in the Southeast (18%), followed by the Midwest (17%), Northeast (13%), then the West (12%). Figure 2 shows there is a good distribution in terms of source markets where visitors come from. This speaks well to the overall appeal and marketing efforts of the Space Coast which reach far and wide. More specifically, after Florida, the most common states of origin were New York (6% of visitors), followed closely by California (5%), Georgia (5%), Illinois (4%), Pennsylvania (4%), and Ohio (3%). Top source market MSAs (cities) were as follows: 1) Orlando (9%) 2) Miami-Ft. Lauderdale (7%) 3) Daytona Beach and other neighboring counties (7%) 4) Jacksonville (4%) 5) New York City (4%) 6) Atlanta (4%) 7) Tampa (4%) 8) Chicago (3%) 9) Los Angeles (3%) 10) Washington, DC – Baltimore (3%) Only 4% of surveyed visitors came from outside the United States. Of these international visitors, 2 in 5 (41%) were from Canada, followed by the United Kingdom (17%) and Germany (12%). To put these metrics in context, it is important to note that in 2023, international visitation to the entire state of Florida lagged behind pre-pandemic levels. International visitation is estimated to return to pre-pandemic levels in 2025. Travel Parties The average party size was 3.1 people. Nearly 2 in 5 visitors (37%) traveled in parties of two. Travel parties of three (19% of visitors) or four (16% of visitors) were also common. Given that, about half (49%) of visitor travel parties included children, many of these larger travel parties were families. VisitSpaceCoast.com

FIGURE 3. REASONS FOR VISITING 10.0%

Vacation/Holiday/Leisure activities Visiting Family and Friends Rocket Launch Attempt Private Occasion (wedding, reunion, etc.) Public Event, Show or Festival Other Departing on a cruise from Port Canaveral Business Flew into MLB & went to another destination Brief stop or overnight stay on the way to final destination Job Interview

VisitSpaceCoast.com

40.0%

50.0%

60.0%

32.0% 13.0% 10.0% 9.0% 6.0% 6.0% 5.0% 4.0% 4.0% 2.0%

Top Activities While people come to the Space Coast for a variety of reasons, they also participate in a number of different activities while they are here (see Figure 4). Top activities include going to the beach (69%), shopping (47%), sightseeing (45%), visiting the space center (37%), and viewing a rocket launch attempt (33%). Note that only 13% said they came specifically to watch a rocket launch, but 33% actually did engage in that activity – which speaks to the high volume of launches we now have |

30.0%

61.0%

Trip Experience Reason for Visiting There are a variety of reasons (see Figure 3) that people traveled to the Space Coast. More than 3 in 5 (61%) came to the area for a vacation or leisure trip. Nearly 1 in 3 (32%) came to visit family and friends. Other top reasons for visiting included coming for a rocket launch attempt (13%), traveling for a wedding, reunion, or other private occasion (11%), attending a public event (9%), or traveling for business (7%). These data show that the Space Coast continues to serve a variety of important purposes for its visitors.

20.0%

FIGURE 4. VISITOR ACTIVITY

% OF VISITORS

Beach activities Went shopping Sightseeing

69% 47% 45%

Visited Kennedy Space Center

37%

Outdoor activities (hiking, biking, bird watching, etc.)

35%

To watch a rocket launch attempt

33%

Watersports (surfing, jet skiing, kite boarding, boating, kayaking, water skiing, etc.)

30%

Visited a space-related museum Went fishing

26% 22%

Visited a non-space-related museum

22%

Visited Brevard Zoo Took an overnight cruise Played in a sporting event Played golf Business activities Other

19% 16% 14% 11% 10% 2%

on the Space Coast. Other activities included engaging in water sports (30%), visiting a museum (space-related – 26%, non-space related – 22%), going fishing (22%), or visiting the Zoo (19%). Further activities include taking an overnight cruise (16%), playing in a sporting event (14%), playing golf (11%), or engaging in a business activity (10%). Those engaging in a business activity might not have come specifically for that purpose as only 7% said the purpose of their trip was business. Overnight Visitors Of the visitors who stayed overnight in the Space Coast area, more than 1 in 3 (36%)

booked hotels, while about 1 in 4 stayed with friends or relatives (27%). About 1 in 6 stayed in a short-term rental home or condo (16%) and 11% stayed in a second home. Smaller percentages of visitors stayed in B&Bs (4%) or RV parks/campgrounds (3%). So, 59% stayed in paid accommodations. This many visitors staying in paid accommodations while in the area highlights the important economic impact of Space Coast visitation as they not only pay Tourist Development Tax, but sales and gas taxes as well. While this shows overnight visitors, it does not speak to the many day trippers that come to the Space Coast.

FIGURE 5. TYPE OF ACCOMMODATIONS 10.0%

20.0%

Hotel/Motel We stayed with friends &/or family 16.0% Short-term rental 11.0% Condo/Vacation Rental/Timeshare 4.0% Bed & Breakfast 3.0% RV/Campground 3.0% Other We did not stay overnight on the Space Coast 0.0%

30.0%

40.0%

50.0%

36.0% 27.0%

VisitSpaceCoast.com

FIGURE 6. AREA OF ACCOMMODATIONS 10.0%

Cocoa Beach/Cape Canaveral Melbourne Titusville Melbourne Beach & South Beaches Palm Bay Merritt Island Indialantic/Indian Harbour Beach/ Satellite Beach Viera I don’t know This is more of a function of the survey tool and how it was administered, overnight visitors were significantly more likely to respond compared to day trippers. A separate analysis should be done to understand what percentage of total visitors are day trippers vs. overnight visitors and what the economic impact might be of those day trippers which are probably significant. Digging into the impact of visitation on specific areas, Space Coast visitors were most likely to stay in Cocoa Beach/ Cape Canaveral (32%). This was followed by Melbourne (15%), Titusville (12%), Melbourne Beach & South Beaches (10%), Palm Bay (9%), Merritt Island (7%), Indialantic/Indian Harbour Beach/Satellite Beach (6%), and Viera (4%). These data indicate that marketing the destination takes visitors to many parts of the Space Coast. Length of Stay Visitors to the Space Coast most commonly stayed in the area for 2 or 3 nights (1 in 5 visitors), while 18% stayed 2 nights and 19% stayed 3 nights. That said, 1 in 8 visitors stayed more than 10 nights, resulting in an average length of stay for overnight visitors of 4.5 nights. It should be noted that this data has very few day trippers, so the typical length of stay is likely shorter when including all day trippers. 24

VisitSpaceCoast.com

20.0%

30.0%

40.0%

50.0%

32.0% 15.0% 12.0% 10.0% 9.0% 7.0% 6.0% 4.0% 4.0%

Visitor Spending The typical visitor to the area reported spending $197 per day and $891 per trip. The average spending per party is $2,762. This is significantly higher than the last time this analysis was done in 2019 when the per party spending was in the $1,300 range. This should be no surprise with rising travel costs over the last several years. Expenditures were bucketed into the following categories, with percentages representing the percent of total visitor spending: • Lodging: 28% • Dining & Beverages: 20% • Recreation & Entertainment: 19% • Retail Shopping (groceries, souvenirs, etc.): 19% • Gasoline: 4% • Local Transportation: 4% • Other Services (medical, dry cleaning, etc.): 6% Because this sample of visitors included few day trippers, this data best represents overnight visitors to the Space Coast. Post-Trip Evaluations When asked about their overall trip experience and their future plans related to the Space Coast, nearly 4 in 5 visitors (79%) reported being very likely to return. More than 9 in 10 visitors (92%) reported being either very likely or likely to return to the

Space Coast. In addition, 92% of Space Coast visitors were very likely or likely to recommend the area to friends and family. In other words, not only does the Space Coast continue to attract a wide variety of visitors from around the country for a myriad of reasons, it satisfies visitors’ needs and expectations. In fact, once people come here one time, they are very likely to return and recommend the experience to friends and family. Further, 1 in 3 (32%) of the visitors who planned to return to the area expected to do so within the next three months. Many planned to return within six months (27%) or within a year (24%). This is a positive

sign: plans to visit the area in the immediate, rather than distant, future indicate a much greater likelihood that visitors will follow through. In other words, the Space Coast can expect visitation to continue throughout the coming year. Cruise Passengers In addition to the activities already mentioned, nearly 1 in 3 visitors took a cruise during their time on the Space Coast and 16% took an overnight cruise. Of those, 93% stayed overnight in an accommodation, over 1 in 4 (27%) stayed in paid accommodations on the Space Coast both before and after their cruise.

FIGURE 7. LIKELIHOOD TO RECOMMEND & RETURN 20.0%

Likely to recommend Space Coast Likely to return to Space Coast

40.0%

60.0%

80.0%

100.0% 92.0% 92.0%

VisitSpaceCoast.com

An additional 46% stayed in paid accommodations in the area only pre-cruise, while 20% did so only post-cruise. Only 7% of cruise passengers did not stay in paid accommodations in the area at any point before or after their cruise. Most of those who stayed in paid accommodations on the Space Coast before their cruise did so for two (27%) or three (29%) nights. The story was similar for those who stayed in paid accommodations after their cruise – around 1 in 4 stayed for one, two, or three nights. This means visitors are engaging in other activities in the area before and after embarking on their cruise. In other words, cruises are bringing both visitor traffic and visitor spending to the Space Coast area. Not surprisingly, cruise visitors spend a little more than other visitors at $237 per person per day. The travel party size is 3.6 people and their length of stay on the Space Coast is 3.6 nights. The shorter length of stay could be attributed to the fact that 26

VisitSpaceCoast.com

they are pairing their stay with an overnight cruise. Their total per party spending is $3,072 which is significantly higher than visitors overall. Cruise Visitor Profile Cruise visitors to the Space Coast had a median age of 38, were largely Caucasian (70% of visitors), and reported an average annual household income of $115,100. Compared to overall Space Coast visitors, cruise visitors were more likely to: • Stay in a hotel • Have larger travel parties (including children) • Be from the Western United States • Spend more money per day in the Space Coast • Recall advertising about the Space Coast • Recall advertising on YouTube • Visit Space Coast related websites to plan their trip International Visitors International visitors to the Space Coast

had a median age of 43, were largely Caucasian (77% of visitors), and reported an average annual household income of $107,600. Compared to domestic Space Coast visitors, international visitors were more likely to: • Stay in Cocoa Beach/Cape Canaveral • Travel as a couple • Stay in the area longer • Come to the Space Coast for a vacation or a rocket launch attempt • Spend more money per day • Recall advertising on a website or in a news story Conclusion This study provides an important picture of visitors to Florida’s Space Coast, revealing patterns and preferences crucial to sustaining and enhancing its status as a top tourist destination. In summary, visitors come from a variety of source markets all over the United States with 37% coming from Florida. A little more than half fly here with the rest

driving in. They typically travel as a family with a party size of a little over 3 and spend over $2,700 while they are here, an average of 4.5 nights for overnighters. We still have more work to do to understand the volume of day trippers. They stay in a variety of accommodations with nearly 60% being paid lodging and they stay all over the County with about 1/3 choosing Cocoa Beach/Cape Canaveral. They engage in a variety of activities while they are here, the main ones being beach-, nature-, or space-related. For those that take cruises, they are staying before or after the cruise and sometimes both. Cruisers spend a little more while they are here and tend to stay in paid accommodations for a slightly shorter period of time. Business (7%) and International (4%) travelers can be seen here as well. As the Space Coast looks ahead, leveraging these insights to tailor marketing strategies and develop new attractions will be key to maintaining its allure and ensuring it remains a destination that both captivates and caters to the diverse needs of its visitors. n VisitSpaceCoast.com

VisitSpaceCoast.com

Florida’s Space Coast THIS SUMMER

From the air, Florida’s Space Coast shows off its many lakes and meandering waterways, not to mention its 72 miles of coastline. With over 20,000 acres of freshwater rivers and lakes and 170,000 acres of wetlands, outdoor enthusiasts love to explore by foot or boat. Summer is the perfect time to experience authentic Florida. From sea turtle nesting on the beach to bioluminescence kayaking, you will find experiences on Florida’s Space Coast that are found nowhere else.

VisitSpaceCoast.com Meteor_ads_turtles.indd 1

/ Florida's Space Coast V i s i t S p a c e C o a s t . c o9/12/18 m 1:51 | PM2 9

Renovating Lori Wilson

RENOVATING LORI WILSON PARK BY MEAGAN HAPPEL

Park

Lori Wilson Park is situated in the heart of Cocoa Beach and is one of the most popular beachfront parks on the Space Coast. The beautiful nature rich 32-acre park hosted over 800,000 visitors in 2022 with more than 80% from outside the county. This activity level has taken some natural wear and tear over the years on the park, its structures, and amenities. Time and funding became available for improvements and construction in 2020. Two large funding sources were a Tourism Development Council Capital Facilities grant ($2.76M) and use of the Beach Fund ($1.25M) authorized by the Brevard County Board of County Commissioners. These refurbishments included replacing the seven crossovers and connectors with a composite material that will last 30+ years (a massive improvement over using wood), completely renovating the dog park (with new sod, fencing, benches, trees, and sprinkler system), replacing shower towers, replacing both the North- and South-side bathroom facilities, and cleaning the hammock by removing invasive plants and trees and completely rebuilding the boardwalk. With the many experiences, activities and uses available at Lori Wilson Park, it is a popular destination for both visitors and residents and is the location for two major events. The stretch of sand in front of Lori Wilson Park hosts the annual P1 Powerboat race Thunder on Cocoa Beach which wows spectators who line the beaches every spring with the start/finish line at Lori Wilson Park. VisitSpaceCoast.com

Every other year, the Cocoa Beach Air Show featuring military headliner jet teams and other displays of aerial acrobatics soar over tens of thousands of fans across Cocoa Beach, but the best views are at show center in the middle of Lori Wilson Park. From the skies to the sea, these are two of the largest events drawing visitors to the Space Coast and selling out hotels closest to the park.

History Back in the 1970’s, the park we’ve all come to know, and love was being used as an unofficial landfill. Florida State Senator, former County Commissioner and Cocoa Beach resident Lori Wilson recognized that cleaning the area could return it to the former natural glory. She put together a matching funds plan with the county and state sharing in the purchase of the property. The trash was cleaned out by various Boys and Girls Clubs over several weeks. The community unanimously decided to name the park after Wilson, who was also a major proponent of manatee protection laws, the Equal Rights Act, and the removal of paid toilets in public women’s restrooms. 32

VisitSpaceCoast.com

Wilson was appointed by Gov. Claude Kirk to fill a vacancy on the Brevard County Commission in 1969 and was the first woman in the state to receive a gubernatorial appointment like this. She then was elected to a full term in 1970 and elected Chair in 1972, the first woman LORI WILSON to do so. Later that year, she was the third woman (and first Independent) elected to the Florida Senate and re-elected in 1974, serving until 1978. Wilson was an honorary director of the Central Florida Zoological Society and legislative director of the Florida Injured Wildlife Sanctuary. Lori Wilson passed away in 2019 at the age of 81, but her impressive legacy lives on.

Mansfield Maritime Hammock The Lori Wilson Park Maritime Hammock was renamed the Mansfield Maritime Hammock in August 2022 to honor the

hard work and inspiring efforts of Phyllis and Howard Mansfield, volunteers who worked to protect this habitat for migratory and local birds that call it home. As long-time residents of Cocoa Beach, the Mansfields were deeply concerned about the health of the hammock, along with the dozens of types of migratory birds that visited the area, as the Hammock is a part of the Great Florida Birding and Wildlife Trail. They removed exotic plants and litter from the hammock, cleaned bird feeders, maintained a watering pond, communicated local conditions to bird watchers, and planted hundreds of native plants and trees in the city. Phyllis Mansfield recounted how she and others had thwarted potential plans to build another road through the hammock. Phyllis said, “This maritime hammock is a wonderful part of the greater Lori Wilson Park and I hope my friends county residents, birders and volunteers - will all work to ensure this maritime hammock’s wildlife habitat will be restored by removing and replacing invasive plants with desirable bird attractors and a water feature.”

Natural Importance Lori Wilson Park is home to many varieties of animals that make the Space Coast such a diverse and unique ecosystem. Local birders have listed 32 species of wood warbler including the rare Cerulean, Nashville, Connecticut, and Wilson’s. As a part of the Great Florida Birding Trail, it is an important stopover for several migrating birds including Painted Bunting, Great Crested Flycatcher, Rose-breasted Grosbeak, Black Terns, and Scarlet Tanager. Many native species such as Laughing Gulls, Lesser Black-backed Gulls, Royal Terns, Black Skimmers, White-eyed Vireo, pelicans, magnificent frigatebird, and Gray Catbird all frequent the hammock and beach.

VisitSpaceCoast.com

The Space Coast is also known as one of the top nesting locations for sea turtles in North America, especially so for loggerheads. The other species seen nesting are leatherbacks, green, and the rare Kemps Ridley. Hundreds of nests are recorded in Cocoa Beach alone, and Lori Wilson Park is often the site of sea turtle releases from Brevard Zoo after rehabilitating hatchling washbacks and sick and injured turtles.

Park Amenities

plenty of convenient parking spaces, ramps to the boardwalk and beaches with mobility matting and ADA compliant restrooms. In addition to the large events mentioned, the park has hosted countless running races, surfing contests, concerts, and of course is a prime location to view a rocket launch from the new boardwalk. The popular dog park located on the southern side offers convenient parking and plenty of run around space for small and large dogs and their humans. Lori Wilson Park is also the hub for Brevard County Ocean Rescue with one seasonally manned lifeguard stand and one year-round manned lifeguard stand making the beach attractive to many for safe swimming and water activities.

The park has become a major destination and gathering place for the community of residents and visitors. Day trip visitors love the park for easy beach access, 276 free parking spaces, beach equipment rentals, food trucks, playground, showers, volleyball court and the beautiful new restrooms. Lori Wilson Park is indeed a unique and Three covered pavilions are available to rent special beachfront park offering plenty of and are often the site of meetings, parties, and other gatherings. Additionally, for those green space for all to enjoy making it a true that need mobility assistance there are gem for our beachside community. n 34

VisitSpaceCoast.com

Caring for Coastlines & Creating

CARING FOR COASTLINES & CREATING MEMORIES BY ALYSSA SERRES & RYAN HAYDEN

Florida’s Space Coast is a popular tourist destination for people from all over the world. Seventy-two miles of coastline provide more than 180 public access beaches that make up some of the most beautiful and picturesque shorelines in the state. Visitors drawn to the Space Coast’s beaches were responsible for over $24 million worth of Tourist Development Tax (TDT) in 2022. The tax is collected on short-term accommodations (any hotel/ motel, vacation rentals, condo, RV/campground rented for six months or less). It is certainly clear that many vacationers desire natural and beautiful beaches. To encourage visitation to the area, the Brevard County Tourism Development Office allocates portions of the Tourist Development Tax into several grant programs that aim to enrich and improve the destination, the visitor experience and benefitting the residents who live here. Reinvesting this money to both foster tourism and work to improve the health of local ecosystems is essential.

Memories

While a steady increase in visitation is good for the economy, it sometimes takes a toll on the environment. According to Tammie Lizon, the Interim Executive Director at Keep Brevard Beautiful (KBB), a non-profit organization that works to promote environmental stewardship and sustainability through community education and engagement, an estimated 1.85 million pounds of trash (which is equivalent to a little more than 928 tons) was collected by the organization from roads and waterways on Florida’s Space Coast in 2023. VisitSpaceCoast.com

Consequently, local organizations and communities are left with the task of removing this debris before it becomes hazardous for fragile ecosystems, wildlife, visitors, and residents. The State of Florida relies heavily on tourism and its natural resources thus protecting the environment and the tourism industry from the impacts of litter is of the utmost importance. The National Oceanic and Atmospheric Administration’s (NOAA) Marine Debris Program recently conducted a study on the economic impacts of marine debris on beaches in several coastal communities in the United States. They found that by removing marine debris from beaches significantly increased the length of stay at the beach, the tourism dollars spent, the value of beach recreation in the area, and an increase in the number of local jobs for those coastal communities. When the trash was left on the beaches, all of those metrics drastically decreased. Having clean beaches helps to promote public health by reducing the risk of illness from polluted water and air, which is important for swimmers, surfers, and other beachgoers who connect with the beach. Clean beaches have a direct link to the livelihood and health of communities, and efforts to reduce and remove debris is essential. In 2023 the Space Coast Office of Tourism conducted an online survey called the Beach Sentiment study. It was discovered that beach quality was the most important factor in choosing a beach destination amongst 500 respondents in our target markets. Beach quality was defined as, being trash-

free, quiet, soft sand, and clear calm waters. Maintaining quality beaches is a hefty task for coastal communities, but a necessary one to improve the quality of life for residents and visitors, and also to preserve and conserve the habitats and life cycles of the native and migratory plants and wildlife on Florida’s Space Coast. Here in Florida, visitors share the beaches with hundreds of species of birds, reptiles and marine animals. As trash invades the ecosystems, once lush and biodiverse areas become uninhabitable. Having the beaches clear of litter helps to ensure that the coastal ecosystem is balanced and safe for marine life and beach vegetation, which helps to preserve the biodiversity of species

“Being named one of the top vacation destinations in Florida definitely brings in more visitors to our area which in turn creates more trash, especially those that leave behind their single use plastics, like water and soda bottles, food containers, straws, and plastic bags.” – TAMMIE LIZON, INTERIM EXECUTIVE DIRECTOR OF KEEP BREVARD BEAUTIFUL 42

VisitSpaceCoast.com

in the ecosystem and protect threatened species from becoming endangered. KBB, an affiliate of Keep America Beautiful, has been active in Brevard County for 42 years and has become one of the largest affiliates in the state of Florida. The organization focuses on educating the community about litter prevention, recycling, and beautification efforts by organizing clean-ups with volunteers from various local civic organizations. These clean-ups bring the community together to raise awareness of trash in our ecosystems while improving the local environment and enhancing the quality of life for residents and visitors. The Space Coast’s natural environments and native animals are clear draws for tourists. The Archie Carr National Wildlife Refuge in the south end of the county is the most significant sea turtle nesting site in North America. To the north, the Canaveral National Seashore and the Merritt Island National Wildlife Refuge provide thousands of acres of native habitats for millions of migrating and local birds, marine mammals, reptiles, and other native species. In the summer, our Intracoastal waterways, which include the

Mosquito Lagoon, Banana River, and Indian River Lagoon illuminate the natural phenomenon of bioluminescence. Birdwatching tours, turtle walks, kayaking, and boating tours enable visitors to truly experience a refreshing glimpse of undisturbed, wild Florida. We realize how tourism to our county relies on healthy natural ecosystems. While people prefer a clean beach and will travel for one, native wildlife need them to survive. Littered beaches make the sea turtle’s journey from nest to sea and back again difficult and dangerous. According to Sea Turtle Healing Center Manager Shannon Gann, “Boating interactions and marine debris ingestion/entanglement are the main reasons sea turtles arrive at the Healing Center.” As if maneuvering around trash on the sand and in the dunes weren’t exhausting enough, discarded plastics develop into a substantially more serious threat as they break down and become microplastics. Gann further explains, ”Since egg incubation is influenced by temperature, scientific studies indicate that beach sand mixed with microplastics could cause temperature fluctuations extreme enough to alter the gender and/or the hatching success of developing eggs.” VisitSpaceCoast.com

Trash on the beaches and in our ecosystems is a major problem that doesn’t have a clear solution. One of KBB’s largest tasks is educating the public about how much trash makes it into our ecosystems and encouraging them to examine their ecological footprint. One of KBB’s most impressive tools is a beach-cleaning robot called BeBot. BeBot is a solar-powered, remote-controlled robot roughly the size of a jet ski that patrols the beaches to mechanically sift sand, removing microplastics and other harmful debris. Manufactured by Porlau Marine, BeBot is the first machine of its kind and was paid for by the Surfing’s Evolution & Preservation Foundation license plates. Impressively, BeBot can clean up to 32,000 square feet of beach an hour, which is roughly equivalent to the size of seven basketball courts. Microplastics are a particularly troublesome type of marine debris and are beginning to gain a lot of much-needed attention from environmental groups. These microscopic pieces of plastic are created when large plastic items begin to age, wear down and break apart, and are easily ingested by animals since they are difficult to see and pick up. BeBot is able to collect a sizable layer of sand and separate this debris

VisitSpaceCoast.com

from the sand so it can be removed from the coast, and while it certainly does a remarkable job of cleaning the beaches, its main purpose is to educate beachgoers on the importance of litter cleanup. BeBot is frequently cleaning beaches at popular

events or combing busy shorelines during peak tourist seasons, but it also makes journeys to other Florida Beaches to reveal just how many types of microplastics lie beneath the surface of the sand. Litter on Florida’s Space Coast is an issue that Brevard County takes very seriously. Using Tourist Development Tax revenue to provide grants to organizations like KBB, we

are able to ensure that our coastline, waterways and natural spaces are being cared for. The passionate individuals and organizations that participate in cleanup operations are dedicated to preserving and conserving ecosystems and the animal populations that inhabit them, while also making the Space Coast a healthy and enjoyable place to live and visit. n

“Our beaches are cleaner than many other Florida coastlines, but we can always do better. We should always be communicating to residents and tourists the importance of removing all trash, including microplastics, from the beach to protect not just sea turtle but also shore bird nesting habitats.” – SHANNON GANN, MANAGER OF THE SEA TURTLE HEALING CENTER VisitSpaceCoast.com

B R A N D

A W A R E N E S S

BRAND AWARENESS WHAT IS OUR BRAND? BY JOSEPH ST. GERMAIN, Ph.D.

Introduction As the world finally returned to venturing outside of their homes in 2020, the Space Coast Office of Tourism partnered with Downs & St. Germain Research to assess the Space Coast Office of Tourism’s marketing. The goals of the study were to assess brand awareness, determine the best approach to attracting visitors, and measure the effectiveness of Florida’s Space Coast’s marketing campaign. To date, four waves of data collection and reporting have been completed. This article will provide an overview of this research effort.

Method Awareness of the destination, recall of destination advertising, and the extent to which advertising influenced respondents’ decision to visit the destination were assessed at four time points, or waves, across three years. There were 1,200 respondents in each wave, for a total of 4,800 respondents across waves. The dates of each wave were as follows: • Wave 1: August 2020 • Wave 2: December 2020 • Wave 3: September 2021 • Wave 4: September 2022

• West Palm Beach • Jacksonville For wave 4, the first five markets above remained the same, but respondents were drawn from Charlotte, NC instead of Jacksonville. Because of this change, this article will focus on data from the markets that were included in all waves (Atlanta, Miami/Ft. Lauderdale, Orlando, Tampa/ St. Petersburg, and West Palm Beach). Potential visitors were between 21 and 70 years old, exceeded $60,000/year in household income, served as key vacation decision-makers, and had stayed in paid accommodations during a trip or vacation in the previous 12 months.

Key Metrics A multitude of questions were asked in each wave. However, this section focuses only on the key metrics used to assess the success of the marketing campaign - destination awareness, advertising recall, influence of advertising on travel, trip booking, and intent to visit. It should be noted that all metrics related to advertising recall and intent to visit increased in the four waves.

Respondents were drawn from six markets in each wave, with 200 potential visitors Destination Awareness from each market. For waves 1-3, these markets were the following: Aided recall of the Space Coast as a beach • Atlanta vacation destination increased in each of the • Miami/Ft. Lauderdale four waves of the study, starting at 55% in • Orlando • Tampa/St. Petersburg wave 1 and moving to 60% in wave 4. 46

VisitSpaceCoast.com

B R A N D

A W A R E N E S S

This pattern – an increase across waves 1-4 occurred in most areas of the Space Coast: • Cocoa Beach (78% aided recall in wave 1 to 82% aided recall in wave 4 [+4%]) • Melbourne & The Beaches (57% to 60% [+3%]) • Titusville (46% to 47% [+1%]) • Brevard County (44% to 49% [+5%]) • Palm Bay (43% to 56% [+13%]) • Viera (23% to 32% [+9%]) • Rockledge (14% to 22% [+8%])

Advertising Recall More potential visitors recalled seeing advertising for the Space Coast (Figure 1) in each wave. In wave 1, 32% of potential visitors reported recalling advertising for the area. By wave 4, that number increased to 42%.

Influence of Advertising & Trip Booking

of potential visitors booked a trip to the Space Coast after seeing the campaign. By wave 4, these figures increased to 29% and 24%, respetively.

Intent to Visit In Figure 3, the percentage of visitors who said they were extremely likely to visit the Space Coast in the next three months increased consistently across waves – from 16% in wave 1 to 30% in wave 4. The same trend emerged with potential visitors reporting their likelihood of traveling to the Space Coast in the next 6 months and in the next 12 months increasing in waves 1-4.

FIGURE 2. TRIP BOOKING DUE TO ADVERTISING 50% 40%

There was also a steady increase across the study in the percentage of visitors who reported that the advertising influenced them to travel to the Space Coast, see Figure 2. In wave 1, 15% of potential visitors were influenced by the marketing campaign, while 12%

30% 20% 10% 0%

FIGURE 1. RECALL OF ADVERTISING

30%

32%

42%

35%

Wave 1

39%

20% Wave 3

Wave 4

50%

10% 0%

37%

32%

30% Wave 2

Wave 3

60%

40%

10 Wave 1

Wave 2

50%

15%

12%

FIGURE 3. 3-, 6- & 12-MONTH TRAVEL INTENT

50% 40%

24% 18%

16%

40% 26% 26%

23% 18%

30%

37%

0% Wave 1

3-Month Intent

Wave 2

Wave 3

Wave 4

6-Month Intent

12-Month Intent VisitSpaceCoast.com

B R A N D

A W A R E N E S S

Key Metrics Conclusion The advertising campaign for the Space Coast demonstrated success in the four waves, with marked improvements in destination awareness, advertising recall, influence of ads, trip booking, and intent to visit. These findings point to an effective campaign that boosted the Space Coast’s profile (including all municipalities) among potential visitors.

Awareness of Specific Places on the Space Coast Awareness of places on the Space Coast rose over the course of the study. Specifically, awareness increased for the Brevard Zoo, the Canaveral National Seashore/Playalinda Beach, the Indian River Lagoon, and the Sebastian Inlet.

VisitSpaceCoast.com

Awareness was consistently highest for the Kennedy Space Center, followed by Port Canaveral and Ron Jon Surf Shop. Specifically, between 89% and 94% of respondents reported having heard of the Kennedy Space Center in each wave of the study. Between 83% and 90% had heard of Port Canaveral and between 68% and 76% had heard of Ron Jon Surf Shop.

Visitation Trends The most common reason across the four waves for not having visited the Space Coast was a lack of knowledge about the area. The second most common reason was a preference for another place. Taken together, these findings highlight an educational opportunity and the potential for advertising to have a powerful impact on visitation to the area.

B R A N D

A W A R E N E S S

The top reasons for visiting the Space Coast were consistent across waves. Vacation/relaxation was mentioned by approximately 2 in 3 visitors, followed by visiting friends and relatives (around 1 in 3 visitors), watching a rocket launch attempt (around 1 in 4 visitors), and visiting the area before or after a cruise (around 1 in 4, increasing with each wave as travelers began to feel more comfortable going on a cruise). Please note that visitors were allowed to select multiples reasons for visiting the Space Coast. The top visitor activities were also consistent across waves. The beach was the #1 visitor activity by a significant margin, with around 7 in 10 visitors going to the beach. Shopping, sightseeing, and visiting the Kennedy Space Center were next, with around 2 in 5 visitors engaging in these activities. Rounding out the top activities were (with at least 3 in 10 visitors participating) watching a rocket launch attempt,

outdoor activities (hiking, biking, etc.), and water sports.

Ratings of Specific Activities The percentage of potential visitors who rated the Space Coast as an excellent place to engage in certain activities increased over time. Specifically, 38% of visitors rated the Space Coast as an excellent destination for family-friendly activities in wave 1, and that number rose to 45% by wave 4. In wave 1, 34% of respondents rated the Space Coast as an excellent destination for cultural activities; by wave 4, it was 38%. Similarly, 36% of respondents rated the area as an excellent outdoor activity destination in wave 1, a number that rose to 43% by wave 4. 37% of respondents rated the area’s dining and beverages as excellent in wave 1 and 43% rated them as excellent by wave 4. Ratings of shopping as excellent rose from 30% in wave 1 to 41% in wave 4.

VisitSpaceCoast.com

B R A N D

A W A R E N E S S Initial Awareness & Information Sources When asked how they initially became aware of the Space Coast, most respondents pointed to friends and family across all four waves. However, an increasing number pointed to online travel reviews, social media, television, and billboards as the study progressed. In addition, the percentage of respondents who reported seeing advertising for the area on Florida’s Space Coast’s social media increased over the course of the study, beginning at 10% in wave 1 and rising to 15% in wave 4. Video streaming services as a source of information about the area also increased, beginning at 5% in wave 1, peaking at 12% in wave 4.

These percentages likely rose partially due to actual changes in visitors’ experiences when visiting the Space Coast. However, these changes in ratings may also suggest that advertising may have been effective for the Space Coast’s ability to provide family-friendly activities, cultural activities, outdoor activities, dining and beverage options, and shopping opportunities.

VisitSpaceCoast.com

When asked how they watch television, the highest percentage of respondents across all 4 waves reported watching TV through paid internet streaming subscription services. This number rose from 75% in wave 1 to 87% in wave 4. The second most common means of watching television was through connected devices, such as a smart TV, Roku, or Firestick. The number of potential visitors who reported watching TV through connected devices rose more gradually, from 49% in wave 1 to 55% in wave 4. Meanwhile, the percentage of potential visitors who reported watching TV with cable decreased in each wave. These information sources may be fruitful avenues for displaying advertising to potential Space Coast visitors. As society leans more heavily on both social media and

B R A N D

A W A R E N E S S

streaming services like YouTube, Netflix, Hulu, etc., marketing campaigns may benefit from an intentional reliance on these methods of advertising over others.

Conclusion This study provides crucial insights for stakeholders and marketing professionals seeking to promote Florida's Space

Coast. The effectiveness of the destination marketing campaign in maintaining awareness, influencing travel decisions, and driving visitation is evident. By leveraging the identified information sources and staying attuned to changing traveler behavior, businesses and marketers can further enhance the Space Coast's appeal and cement its position as a top destination in the years to come. n

VisitSpaceCoast.com

Space Coast TDT: Trends, Nowcasting & 52

VisitSpaceCoast.com

SPACE COAST TDT: TRENDS, NOWCASTING, & FORECASTING BY MIKE SLOTKIN, Ph.D.

1.0 Introduction Pursuant to Florida Statute (F.S. §) 125.0104 – the Local Option Tourist Development Act – the Brevard County Board of County Commissioners, in accordance with the provisions of the statute, is permitted to levy a tourist development tax, commonly referred to as TDT or the “Bed Tax.” Unless exempted, F.S. § 125.0104 mandates “that every person who rents, leases, or lets for consideration any living quarters or accommodations in any hotel, apartment hotel, motel, resort motel, apartment, apartment motel, rooming house, mobile home park, recreational vehicle park, condominium, or timeshare resort for a term of 6 months or less is exercising a privilege which is subject to taxation.” In Brevard County, Florida, also known as the “Space Coast,” the TDT has been in effect since the late 1980s. In its first 36 years of existence, fiscal years (FY) 1987-2022, accrued revenues have surpassed $272 million.

Forecasting

At its inception in 1986, the Tourism Development Tax (TDT) was levied at two cents on the dollar. In subsequent years, an additional cent was added in 1989, 1994, and 2005, yielding Brevard’s current TDT assessment of five percent. Each cent of the TDT has designated uses under the administration of the Brevard County Tourism Development Office (TDO), and as approved by Brevard County’s Board of County Commissioners. VisitSpaceCoast.com

Once administrative and tax collecting fees have been subtracted from projected yearly proceeds, and a 5 percent statutory holdback is established, budgeting must be formulated adhering to those stipulated uses. Figure 1 aggregates the designated categories of expenditure over the entire five percent accrual rate, providing a concise snapshot of spending distributions. As would be expected, TDT proceeds are targeted towards direct promotion and advertising (48.4 percent plus an additional 2 percent on a tourist information center) as well as supporting the natural (beach 25 percent) and physical assets (capital 14 percent) of the Space Coast which facilitate those tourism draws. The remaining balance of funds supports various cultural events (4 percent) which can produce “heads in beds” and two featured tourism destinations - the 75-acre Brevard Zoo (5 percent), soon to be celebrating its 30th anniversary, is acclaimed as one of the best small-market zoos in the United States, and the United States Specialty Sports

FIGURE 1. SPACE COAST TDT: CURRENT SPENDING DISTRIBUTIONS 4.00%

2.00% 1.65 1.65%

5.00%

14.0% 48.3% 25.0%

Promotion/Advertising Beach Improvement Capital Facilities Brevard Zoo 54

VisitSpaceCoast.com

Cultural Events Tourist Info Center USSSA

Association (USSSA 1.7 percent), which now headquarters in Viera and offers a hotbed of national youth and adult sporting activities. The Tourist Development Office (TDO) has commissioned Florida Tech, through its Office of Sponsored Research, to examine both trends in the TDT as well as a “deeper dive” into the associations between tax accruals and the commonly reported data metrics provided by its chief commercial data vendor STR™ (www.str.com). Formerly known as Smith Travel Research, STR™ is a global leader in lodging data and analytics, and its weekly and monthly STR™ reports on occupancy, average daily room rate (ADR), revenue per available room (RevPAR), and supply and demand variables are the industry standards cited and utilized by hotel chains, tourism offices and professionals. Accordingly, this paper proceeds by first reviewing the data history of the Space Coast TDT, followed by an examination of sectoral and lodging-type segment changes which have manifested during the past six years. A review of STR™ data then serves as an antecedent to the development of an empirical model for both nowcasting and forecasting bed tax collections. While the latter term is generally known, the idea of nowcasting, which essentially implies forecasting the present, is not commonly known. But from a practical perspective, with an empirical model based on STR™ data that becomes available in real time (i.e., weeks not months), nowcasting TDT receivables becomes possible. The TDO receives a report on tax receipts from the tax collector approximately five weeks after the end of the month in question. A monthly STR™ report which includes both room availability and RevPAR metrics – two of the needed inputs for forecasting – is distributed about 15 days after the end of the month in question. However, STR™ data is also available on a weekly basis, and as the month proceeds, STR™ data

can reasonably approximate what a monthly average will be. This facilitates a real time understanding of what, for example, June 2023 tax collections might amount to six weeks before the official TDT report. STR™ also offers quarterly projections on the ensuing 18-month pathway for RevPAR. These projections, used in conjunction with pipeline reports on upcoming changes in room capacity, can also be utilized for traditional forecasting, which is also provided in this article. For comparative purposes, an empirical forecast model based on headline macroeconomic variables such as jobs and an inflation index, with seasonal variation captured by dummy variables, is also included. The results from the headline macro model are more bullish than the STR™-based projections and utilize variables that are not solely connected to tourism. Readers of this article, whether professionally interested in the subject matter or not, may still wonder why this subject matter is important, and what the implications are.

Succinctly, the tax revenues involved are sizable, and its implications for TDO operations and policy, and the menu of possibilities and attendant debate are significant. As stated at the beginning of this article, FY’s 1987 through 2022 – a 36-year period – yielded about $272 million in TDT revenues. Under modest assumptions, the next five fiscal years (i.e., FY’s 2023-2027) should generate for Brevard County in the neighborhood of $130 million in TDT accruals. It is entirely plausible that within the next five years, the critical threshold of $30 million in TDT collections will be achieved, which according to F.S. § 125.0104, would then permit Brevard to be considered a “high tourism impact county.” This would enable the Brevard County Board of County Commissioners, if it so chose, to vote on a “sixth cent” of TDT. This would likely yield an additional $6-7 million in the ensuing year. In overview, important looming decisions await Brevard County, and the TDO’s important research, showcased within the Tourism Journal, can help inform policymakers in their deliberations.

VisitSpaceCoast.com

2.0 Historical Perspectives In order to develop a future-looking forecast, we must have data that is grounded in the past. Figure 2 neatly encapsulates the more than three decades of the Space Coast TDT revenues. For clarity purposes, fiscal years run from October 1 – September 30, and the fiscal year assigned is associated with the latter year. So, for example, FY 2022-23 spans from October 1, 2022 through September 30, 2023, and the TDT collections for that period of time were $25.6 million. Due to significant seasonal effects, for an accurate report it is appropriate to use rolling totals (or averages) over the preceding 12 months, and for the period running from October 2022 through July 2023, TDT averaged $2.13 million per month. The fact that prior to February 2022 Brevard County TDT collections had only exceeded $2 million per month twice (i.e., March 2019 and July 2021) is indicative of the rapid recovery and expansion experienced post-COVID. In its first decade, TDT collections increased on average by about 17.4 percent per year, fueled by the two increases (i.e., 1989, 1994) in the TDT of one cent each, bringing the total levy to four percent by the mid-1990s. Over the next ten years, ending with the onset of the Great Recession (2008), collections

increased on average by about 7.7 percent per year, with 2005’s one cent increase as a principal driver. Keep in mind that the larger the initial tax rate is, the smaller the incremental bump in revenues derived by increasing the levy by one cent. In FY 2006, the Space Coast accrued about $8.53 million in bed tax revenues, but with the ensuing housing collapse and financial crisis, collections stagnated over the next seven fiscal years due to GDP and employment contraction and the slow pace of economic recovery. Over the entire period – depicted in black – collections in total grew by only 3.7 percent. When recovery finally gained traction (i.e., FYs 2013-17; depicted by the black dots), revenues grew by about 54 percent over the four-year period, and amounted to $13.6 million as FY 2017-18 commenced in October 2017. This was also the time frame immediately following Hurricane Irma’s landfall and strike on the west coast of Florida in mid-September. In Figure 2, the post-Irma data points are designated with orange bars, and this period will take center stage in the balance of this article. Despite a COVID-related downturn the likes of which had never been seen before, overall TDT revenue growth from October 2017 through May 2023 has amounted to about 90 percent. In fact,

FIGURE 2. THE TDT: HISTORICAL COLLECTIONS BY FISCAL YEAR (1987-2022) Early Years

$24,000,000

Great Recession

Recovery

Post Irma

2017

2021

$18,000,000 1 cent increase

$12,000,000

1 cent increase

$6,000,000 $0

1987

1990 Early Years

VisitSpaceCoast.com

1995

2000

Great Recession Years

2005

2007 Recovery Years

2013

Post Irma Years

from the COVID-19 trough of FY 2019-20, when collections amounted to about $13.07 million, revenue escalation has proceeded with such pace that that FY 2022-23 ended up at $25.6 million, which was a 96 percent increase in just three fiscal years, or a 60% increase from the pre-COVID year of FY 2018-19 which was $16.02 million.

Rico) utilized lodging on the Space Coast, supported by FEMA dollars. This effect started to dissipate with FY 2018-19, when the annual growth rate in TDT revenues dipped from 14.6 to 2.8 percent, and within another six months the COVID-induced meltdown would actually reduce collections by an astounding 18.5 percent.

A singular explanation for this remarkable period does not suffice. Early in the cycle – post-Hurricane Irma – the Space Coast was the beneficiary of tourism demand that was shifted from other destinations that were impacted during storm recovery. In addition, many individuals displaced in areas where housing was destroyed (e.g., Puerto

The “noise” from these external weather and pandemic drivers masked many favorable organic trends that had been quietly percolating prior to COVID. For example, the Space Coast finally lived up to its moniker once again with the full transition away from the shuttle program. VisitSpaceCoast.com

The return of rocket launches generated crowds and renewed interest in the Kennedy Space Center Visitor Complex and the United States Astronaut Hall of Fame. It has also fueled an increase in hotel room capacity in Titusville, whose TDT collections have held up quite well during the recovery. What was also lost in the COVID-fire was the burgeoning cruise sector, with larger ships and passenger counts. Post-cruise stays as well as pre-cruise stopovers are key contributors towards tourism’s recovery and should play a greater role in the next decade. As stated earlier, some TDT dollars are targeted towards USSSA, which draws thousands of families to the Space Coast for youth and adult sporting events. Hotel capacity in Viera has blossomed in the past decade, and sports tourism plays a big part in that equation, as does the Brevard Zoo. Additionally, increased room capacity along I-95 in Melbourne and Palm Bay has generated both drive-by and business visitation. As will be discussed in the next section, the greater Melbourne-Palm Bay market (excluding beachside) is now a bed tax anchor for the Space Coast. These factors played a vital role in the post-COVID tourism recovery, complemented by the fact that with more restrictions on international travel, domestic tourism opportunities benefited.

Notwithstanding these drivers, the X-factor in the post-Irma TDT renaissance resides within the “Management” segment (as described in the Tax Collector reports), which encompasses vacation rentals including Airbnb, Expedia (VRBO), and other such portals. When these short-term rental companies developed a contracted arrangement with the Tax Collector to ensure the TDT collection on properties rented under their platforms, it moved formerly “shadow” rentals (unreported TDT) into the sunlight (reported). And while that’s part of this story, the short-term rental market has also generated new and significant demand. Figure 3 segments TDT collections by listing source using the categories of Hotel/Motel, MGT (Management), and “Other,” which is comprised of RV Park/ Campgrounds, Condos, and Vacation Rentals. The “Other” items would not be rented under the aforementioned portals. For each monthly observation, the rolling total for the previous 12 months is utilized, avoiding any seasonal issues. With respect to the Hotel/Motel sector, at the commencement of the COVID crisis about $12.65 million in TDT revenue accruals (labeled Pre-COVID Peak) had been received in the previous 12 months. As can be observed, recovery to this level took almost two

FIGURE 3. TDT BY TYPE - YEARLY ROLL (SEP 2017 - MAY 2023)

$20,000,000 $16,000,000 $12,000,000 $8,000,000

Recovery to prior level

Pre-COVID Peak

$4,000,000 $0

9/2017

3/2018

9/2018

Rolling Hotel/Motel 58

VisitSpaceCoast.com

3/2019

9/2019

Rolling MGT

3/2020 Other

9/2020

3/2021

9/2021

3/2022

9/2022

3/2023

years, yet by May 2023 TDT collections, at $17.1 million, were a robust 35.3 percent higher than they were in February 2020. Comparing what transpired in the Management (MGT) category provides a rather stark contrast. Of principal note is the lack of any sizable downturn due to COVID, and the almost immediate recovery. It took about seven months – from February 2020 ($2,291,508) to September 2020 ($2,289,983) – to erase any losses. As this report is being written, bed tax collections associated with the MGT sector, at $6.7 million, are an astounding 192 percent higher than they were at the onset of the pandemic. The fact that revenues in this segment grew by 92 percent from September 2017 to February 2020 indicates that this category was already on an upward arc prior to COVID, for reasons previously discussed, but likely was well positioned for the pandemic due to the nature of its product and the fact that from a health and safety perspective, individual vacation rental units might be deemed more favorably. On a propor-

tional basis, the ratio of MGT vs Hotel/Motel collections is at present, stabilizing. Future research may wish to explore whether COVID was, in fact, an X-factor for the MGT sector. Finally, a casual inspection of the “Other” segment illustrates the stagnation experienced in that category. With growth essentially flat, the 7.5 percent of bed tax collections currently held will slowly erode as the Hotel/ Motel and MGT segments continue their ascent. Further details on the changes experienced, both geographical and via lodging type, will be presented next.

3.0 Sectoral Changes On a monthly basis, the TDO is provided by the Brevard County Tax Collector a tabular summary of bed tax collections by geographic zone as well as lodging type. Chart 1 details the breakdown of tourism development tax revenues by percent composition for FY’s 2017-22, and FY 2022-23 through May.

CHART 1. PERCENTAGE OF TDT BY TYPE AND ZONE (FY 2017–FYTD 2023) Percentage of TDT Collected by Lodging Category TYPE FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Condo 5.20% 5.32% 5.23% 5.20% 3.82% 3.14% 2.80% Hotel/Motel 78.20% 76.67% 75.05% 71.08% 64.41% 66.59% 65.73% Vacation Rental 6.10% 6.38% 5.21% 4.56% 3.78% 3.09% 2.96% Rv Park/Campground MGT Companies ZONE Titusville Cocoa Beach/Cape Canaveral Cocoa-Merritt IslandRockledge Melbourne Beach Area Greater Melbourne/ Palm Bay MGT Companies

1.70% 1.61% 1.56% 1.64% 1.68% 8.80% 10.02% 12.96% 17.53% 26.32% Percentage of TDT Collected by Geographic Area FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 7.00% 7.19% 7.02% 7.17% 6.27%

1.41% 25.77%

1.42% 27.09%

FY 2022 6.67%

FY 2023 6.42%

43.60%

41.15%

39.86%

35.64%

31.80%

32.93%

33.79%

4.20%

4.21%

3.70%

3.72%

3.33%

2.54%

2.15%

16.50%

8.96%

9.03%

8.95%

7.82%

6.96%

5.75%

20.00%

28.48%

27.43%

27.01%

24.46%

25.13%

24.80%

8.80%

10.02%

12.96%

17.53%

26.32%

25.77%

27.09%

VisitSpaceCoast.com

In first examining lodging by type, what captivates the reader is the percentage of total collections accruing to the MGT sector, and more specifically, its meteoric rise from FY 2018-19 to FY 2020-21. In FY 2016-17, one out of every 12 dollars of TDT collections was derived from MGT; today it manifests at about one out of every four. By comparison, in FY 2016-17 almost four out of every five dollars of TDT revenues originated from the Hotel/Motel segment; today it constitutes about two out of every three. The discrete nature of fiscal years sometimes shrouds inflections; employing monthly rolling figures can provide for a more granular visual. In Figure 4, 12-month rolling bed tax totals for the MGT and Hotel/Motel segments, in ratio form, are graphed. In September 2017, the prior 12 months of MGT accruals amounted to just over 11 percent of Hotel/Motel collec-

0.50

FIGURE 4. TDT RATIO ROLLING MGT VS ROLLING HOTEL/MOTEL (SEP 2017- MAY 2023)

tions. This ratio gradually climbed to 18.5 percent by May 2020, then escalated to 42.8 percent exactly one year later. Over the past two years – May 2021 through May 2023 – the ratio has stabilized in the neighborhood of 40 percent. This stabilization plays a subtle but vital role in the nowcasting analysis which follows later in this report. STR™ data can be utilized to statistically estimate, through regression analysis, a relationship between RevPAR and Hotel/Motel TDT collections. But to ascertain ALL TDT collections, a guiding assumption must be employed that associates the estimated Hotel/Motel TDT accruals to MGT collections. In the preceding two years, the stabilization in ratio of rolling MGT v. Hotel/Motel affords that possibility. Examining Figure 5, which showcases the actual ratio of MGT v. Hotel/ Motel collection in each individual month, it is obvious that, for example, January

FIGURE 6. TDT RATIO ROLLING OTHER VS ROLLING HOTEL/MOTEL (SEP 2017-MAY 2023)

0.24

0.40 0.30

0.16

0.20

0.08

0.10 0.00

0.75

9/2017 12/2018 10/2019 8/2020 6/2021 9/2022 2/2023 FIGURE 5. RATIO OF MGT TO HOTEL/MOTEL TDT RECEIPTS (OCT 2020 - AUG 2023)

0.08

0.4

0.20

FIGURE 7. RATIO OF OTHER TO HOTEL/MOTEL TDT RECEIPTS (APR 2021 - MAY 2023)

0.12

0.50

9/2017 7/2018 10/2019 8/2020 11/2021 9/2022 2/2023

0.16

0.60

0.25

0.00

0.04 10/2020 7/2021 10/2021 7/2022 10/2022 5/2023

VisitSpaceCoast.com

0.00

4/2021 10/2021 4/2022 10/2022 4/2023

through May observations in 2022 and 2023 (see the blue lines), track remarkably well. The latest 12-month ratio percentages will be utilized in the now casting analysis. The last of the three lodging-type TDT collection segments, the OTHER category, can be processed in a similar vein. Figures 6 and 7 highlight sufficient stabilization and consistency over the past two years in actual collection ratios to afford usage in forecasting the near term. Obviously, these relationships should be monitored continuously. Turning our attention to TDT collections by geographic zone, Chart 1 (see page 59) also reveals the decline in the relative weighting of Cocoa Beach/Cape Canaveral, the historical anchor of Space Coast tourism, from 43.6 percent to 33.5 percent. During the same time frame, Greater Melbourne/ Palm Bay rose from about 20 percent to about 25.3 percent, and the MGT segment, whose geography is unknown (because the portals do not specify where their collections are coming from), increased from 8.8 percent to about 26.6 percent. Both Greater Melbourne/Palm Bay and MGT have increased their TDT collections to about 75 percent of the Cocoa Beach/Cape Canaveral haul, a transformative movement in just six years. As Figure 8 so aptly illustrates, there are now three principal geographic anchors.

1.00

FIGURE 8. ROLLING BED TAX RATIOS V. COCOA BEACH/CAPE CANAVERAL (SEP 2017 - MAY 2023)

0.75 0.50 0.25 0.00

9/2017 9/2018 10/2019 8/2020 6/2021 9/2022 2/2023

Rolling GTR Melbourne/Palm Bay v. CB/CC Rolling MGT v. CB/CC

Chart 1 also showcases the steady TDT growth of the Titusville segment, and the dwindling accruals from the Melbourne Beach Area. Indeed, Titusville now rivals Melbourne Beach in collections, which would not have been deemed likely six years ago, when its TDT was less than 43 percent of the Melbourne Beach haul. And while this has certainly been an interesting backward glance at Space Coast TDT collections, this article next explores the near-term future as we turn towards nowcasting.

4.0 Nowcasting with STR™ Data The TDO’s chief data and analytic vendor, STR™, distributes on a weekly and monthly basis, data captured from its survey of a large percentage of the existing Hotel/Motel census. In June 2023, this sample (74 of 113 properties; 9,190 out of 10,374 rooms) covered almost 89 percent of available room capacity. Metrics such as Occupancy rates (OCC; the percent of available rooms sold), Average Daily Room rates (ADR; total revenue earned divided by the number of rooms sold), RevPAR (total revenue earned divided by the number of available rooms), room availability (i.e., the Census of rooms), and other data markers are tracked continuously by region as well as comparative benchmark areas. By designating OCC in percent, ADR and RevPAR in $, and the Census in 100s of units, all four metrics can be depicted in one convenient graph (Figure 9, see page 62), highlighting salient points of demarcation as well as relationships with one another. The Census or room capacity, rose from a rolling 12-month average of 8,856 (i.e., 88.56 x 100) in September 2017 to 10,539 in May 2023. Capacity during that time frame rose by just under 20 percent, and is expected to rise further in the next 18 months as another 1,500 or so rooms move through the pipeline. A visible dip in capacity can be observed over the past year as a large Cocoa Beach hotel was taken offline for the construction of a new 4-star establishment. VisitSpaceCoast.com

The occupancy rate (Rolling Occ), excluding the COVID downturn, typically yields a 12-month rolling average at 70 percent +/- 2 percent, highlighting the benchmark utilization rate. Please note the gravitation towards that benchmark OCC rate, irrespective of rising capacity. Regarding Rolling ADR, small, gradual increases were experienced pre-COVID, followed by a 25 percent contraction

160.00

FIGURE 9. STRTM METRICS ROLLING MONTHLY AVERAGE; POST HURRICANE IRMA (SEP 2017–MAY 2023)

120.00 80.00 40.00 0.00

9/2017 9/2018 10/2019 8/2020 6/2021 9/2022 2/2023

Rolling ADR ($) Rolling RevPar ($)

VisitSpaceCoast.com

Rolling Census (100s) Rolling Occ (%)

in pricing during the first year of the pandemic. In the past two years, however, rolling ADR averages have risen by more than 50 percent, but appear to be flattening in summer 2023. Intuitively, rising OCC and ADRs will yield healthy RevPAR (Rolling RevPAR) increases,

350.00

FIGURE 10. STRTM METRICS ROLLING 12-MONTHLY AVERAGE; POST HURRICANE IRMA (SEP 2017 - FEB 2023)

300.00 250.00 200.00 150.00 100.00 50.00 0.00

9/2017 9/2018 10/2019 8/2020 6/2021 9/2022 2/2023

Rolling Imputed REV ($100K) Rolling RevPar ($) Rolling Occ (%)

which occurred during the COVID recovery phase. Since February 2021, the 12-month rolling average RevPAR has increased by over 140 percent. Recently, with ADR rising only slightly, and with OCC falling slightly, RevPAR growth has slowed, albeit still marginally increasing. However, given the fact that the 12-month Rolling Census average is falling, rolling revenue accruals (i.e., Rolling Revenue = Rolling RevPAR * Rolling Census) are starting to flatline (see Figure 10, Rolling Imputed REV). A reading of 328.42, which is scaled in hundred-thousand dollars, implies a 12-month rolling average of $32,842,000 per month, or $394.1 million per year. Unless some portion of that figure is exempt from TDT, that revenue figure constitutes the base for which the TDT (5 percent) is levied upon the Hotel/Motel sector. This excludes contributions arising from MGT and Other lodging types, which constitute about 50 percent of the Hotel/Motel sector.

4.1 Model Building Pricing in conjunction with room sales drive revenues, which is circumscribed by available capacity. The applicable tax rate (i.e., 5 percent) is levied against that revenue base, yielding Hotel/Motel TDT collections. So, if one knows RevPAR, room capacity (CENSUS), and the number of days in a month (DAYS), the ingredients for formulating an empirical model that can be statistically validated are available. STR™ provides RevPAR and

120.00%

FIGURE 11. IMPUTED TDT YIELD % (SEP 2017 - MAY 2023)

90.00% 60.00% 30.00% 0.00%

9/2017 9/2018 10/2019 8/2020 6/2021 9/2022 2/2023

CENSUS data on a weekly (real time) and monthly (two-week lag) basis as well as quarterly forecast projections. Support for this approach can be discerned by calculating what the Hotel/Motel TDT collections would be if the revenues taxed did conform to multiplying RevPAR x CENSUS x DAYS. Applying a five percent levy against those revenues would yield an imputed level of taxation. Comparing that imputed level to the actual TDT revenues collected would establish a yield ratio, where stability would connote support for this approach. For a variety of reasons – measurement error, sampling error, time lags in tax accrual, tax exemption of some purchases – the imputed TDT yield ratio is unlikely to be 100 percent (i.e., 1 to 1). However, as can be observed by inspection of Figure 11, the yield ratio typically benchmarks at 90 percent, which is even more obvious if one ignores the COVIDnoise of 2020. Accordingly, a specific model for Hotel/ Motel TDT collections was formulated via equation 1 below. STR™ data for the period from October 2016 through April 2023 (i.e., OCC, ADR, RevPAR, Census) were tabulated along with actual monthly Hotel/Motel TDT collections and the number of days in each month. Appendix A captures all the relevant data as well as items of descriptive value. Column 1 contains the dependent variable (i.e., actual Hotel/Motel TDT collections), while columns 4-6 hold the explanatory variables (i.e., RevPAR, Census, and Days). 1) Hotel/Motel TDT Collections = a + b(REVPAR) + c(CENSUS) + d(DAYS) Regression analysis, a statistical technique utilized to estimate the coefficients a, b, c, d as well test for statistical significance, was employed. Summary Output 4.1 from the regression run can be viewed on page 64. With an R2 (the coefficient of determination) at 98 percent, the model explains almost all the variation observed in the dependent variable. VisitSpaceCoast.com

The F-test indicates that the model is stacollections can be compared to the actual tistically significant, while the t-stats and values, which is showcased in Figure 12. associated p-values reveal all the coefficients estimated are also statistically significant. (2) H/M BT = -2,160,815.2 + 12,260.3*(REVPAR) + 122.6*(CENSUS) + Equation 2 represents the empirically 34,454.4*(DAYS) estimated Hotel/Motel TDT model. Utilizing the sample data for the months from 4.2 Forecasting in the Present October 2016 through April 2023, the model’s predicted values for past TDT As this section is being composed in late-July 2023, the June monthly STR™ FIGURE 12. NOWCASTING summary report has been available for REGRESSION MODEL about a week. The June 2023 STR™ (OCT 2016 - FEB 2023) report lists a Census of 10,374 rooms, $2,250,000 which combined with “30” days in June $1,500,000 and entered into equation 2 (see below, equations 3A-3B), yields a simplified Hotel/ $1,000,000 Motel TDT collection formula with an intercept just in excess of $144K and a RevPAR $500,000 slope term equal to $12.26K. The June $0 2023 RevPAR was estimated to be $100.37; 2/2017 2/2018 2/2019 2/2020 2/2021 2/2022 2/2023 accordingly, by substitution H/M BT = Actual Hotel/Motel Predicted Hotel/Motel $1,374,945. SUMMARY OUTPUT 4.1 Regression Statistics Multiple R 0.99 R Square 0.98 Adjusted 0.98 R Square Standard 46,853.87 Error Observations 79 ANOVA df Regression 3 Residual 75 Total 78 Coefficients Intercept -2,160,815.21 RevPAR 12,260.34 Census 122.57 Days 34,454.43 64

VisitSpaceCoast.com

SS 8.24595E+12 1.64646E+11 8.41059E+12 Standard Error 207,348.73 222.43 7.39 6,327.58

MS 2.7E+12 2.2E+09

F Significance F 1252.06923 6.01594E-64

t Stat -10.42 55.12 16.58 5.45

P-value 3.1094E-16 1.9363E-62 8.4592E-27 6.2838E-07

Lower 95% Upper 95% -2,573,875 -1,747,755 11,817 12,703 108 137 21,849 47,060

3A) H/M TDT = -2,160,815.2 + 12,260.3* (REVPAR) + 122.6*(10,374) + 34,454.4*(30) 3B) H/M TDT = 144,374 + 12,260.3 * (100.37) = $1,374,945 Given that every dollar of H/M TDT collections typically captures another 50 cents from the lodging-type segments of MGT and Other, total TDT collections for the month should arrive at a little over $2 million. More specifically, using the associated contribution factors of 0.396 (for MGT) and 0.127 (for Other), the total TDT estimate for June 2023 amounted to $2.094 million. This constituted $1,374,945 in Hotel/Motel collections, $544,478 in “MGT” proceeds (i.e., 0.396 x $1,374,945), and $174,618 in “Other” accruals (i.e., 0.127 x $1,374,945). For transparency, the associated contribution factors can be gleaned from Figures 5 & 7, and they are the figures observed in June 2022. If this analysis had been performed in mid-June 2023, lockstep with the 3rd weekly STR™ report of the month, the Nowcast projection for June, at $2.089 million, would have reasonably approximated the end of month projection. But, in fact, these are projections. Due to a significantly higher than expected yield of TDT collections from the MGT sector (i.e., a contribution factor

of almost 0.47), June 2023 actualized revenues arrived at $2.226 million, about 6 percent higher than estimated. It should be noted, however, that the actual Hotel/Motel TDT accrual of $1.402 million was within 2 percent of its projection.

4.3 Forecasting in the Near Term On a quarterly basis STR™ does provide forecasts for a host of lodging metrics for the ensuing 15 months beyond the current quarter. In Chart 2, shaded in beige, are the STR™ RevPAR forecasts through the fourth quarter of FY2024 (i.e., Jul-Sep 2024). Utilizing the expected census count inclusive of new projects coming online, and monthly contribution factors for the associated TDT collections garnered from the “MGT” and OTHER” sectors, total TDT forecasts can be derived for the period from July 2023 through September 2024. They are found in the last column of Chart 2 (see page 66), and are also aggregated into quarterly estimates. Please recall that the Hotel/Motel forecast relies on the estimated regression equation, while the MGT and OTHER forecasts multiply the Hotel/Motel forecast by the associated factors listed. Those associated contribution factors are the relevant monthly observations from the preceding year. VisitSpaceCoast.com

Estimated models are designed to yield expected or predicted values that will seldom if ever equal the true values actualized. But it should also be apparent that actualized divergences from the forecasted values can be experienced due to changes in any of the assumed parameters listed. If capacity is beset by an unexpected closure, if the MGT and/or OTHER sectors experience higher (or lower) activity than expected, and most importantly, if the RevPAR forecast fails to closely approximate what actually transpires, model results will differ from the initial forecasted values. Using the values for RevPAR for July 2023–September 2024 contained in STR™’s 2023 Q3 forecast report, TDT collections

are projected to actualize at just under $5.687 million for FY 2022-23-Q4, and a little over $27 million for FY 2023-24. These estimated values recognize downward revisions in STR™ RevPAR forecasts which have been occurring during the first three quarters of 2023. It should be noted that actual collections for July and August collectively amounted to $3,920,182, about $194K less than the forecasted figures or within 4.9% of forecast.

5.0 Macro Forecasting Model In order to provide context to the results from the previous Nowcast analysis, which was based on monthly STR™ data, an empirical forecast model based on headline

CHART 2. TOTAL TDT FORECASTS BASED ON STR REVPAR FORECASTS (JUL 2023–SEP 2024)

Month & Year

RevPAR Census Days

Other Factor

MGT Forecast

Other Forecast

Jul-23 Aug-23 Sep-23

$103.10 10,374 $89.52 10,374 $76.28 10,496

31 $1,442,815 31 $1,276,358 30 $1,094,557

0.440 0.405 0.322

0.095 0.083 0.115

$634,839 $516,925 $352,447

31 $1,254,098 30 $1,274,113 31 $1,276,705

0.360 0.330 0.366

0.088 0.093 0.121

$451,475 $420,457 $467,274

$90.23 10,691 $123.78 10,819 $149.20 10,819

31 $1,323,935 29 $1,682,014 31 $2,062,636

0.567 0.404 0.397

0.137 0.111 0.139

$750,671 $679,534 $818,866

Apr-24 May-24 Jun-24

$114.70 11,026 $102.31 11,026 $104.88 11,201

30 $1,630,586 31 $1,513,068 30 $1,531,613

0.403 0.380 0.469

0.102 0.091 0.119

$657,126 $574,966 $718,327

Jul-24 Aug-24

$112.14 11,201 $94.62 11,201

31 $1,655,015 31 $1,440,223

0.440 0.405

0.095 0.083

$728,206 $583,290

$137,067 $2,214,722 $105,938 $1,899,221 $125,874 $1,572,878 $5,686,821 Q4 - FY2023 $110,361 $1,815,933 $118,493 $1,813,063 $154,481 $1,898,460 $5,527,457 Q1 - FY2024 $181,379 $2,255,986 $186,704 $2,548,251 $286,706 $3,168,209 $7,972,445 Q2 - FY2024 $166,320 $2,454,033 $137,689 $2,225,722 $182,262 $2,432,202 $7,111,957 Q3 - FY2024 $157,226 $2,540,447 $119,538 $2,143,051

Oct-23 Nov-23 Dec-23

$84.98 10,646 $89.43 10,646 $86.83 10,646

Jan-24 Feb-24 Mar-24

Sep-24

$78.27 11,201

30 $1,205,396

0.322

0.115

$388,138

VisitSpaceCoast.com

Hotel/Motel MGT Forecast Factor

TDT Forecast

$138,621 $1,732,154 $6,415,653 Q4 - FY2024

macroeconomic variables was also estimated (see equation 3). (3) TDT = a + b*(FL Jobs) + c(CPI) + d(D1) + e(D2) + f(D3) The dependent variable to be estimated is ALL tourism development tax (TDT) revenues. Observations are listed on a quarterly basis, a period conducive for seasonal trend analysis. For explanatory purposes, nonfarm payroll employment in the state of Florida, a metric indicating both the size of population as well as the magnitude of earnings, is specified. Florida jobs, as opposed to overall US employment numbers, was chosen due to the belief that the Space Coast draws a fair bit of in-state tourism drive traffic. The Consumer Price Index (CPI) for All Urban Consumers was also included as an independent variable. Benchmarked at a value of 100 (1982-1984),

the CPI measures the change in a prototypical market basket of goods and services purchased by the average urban consumer. It is the key macroeconomic indicator of inflation, and generalized inflation likely is associated with higher lodging amenity prices. For Brevard County, a casual inspection of TDT collections on a quarterly basis offers prima facie evidence of seasonal trends in accruals. Appendix B (see page 74) details the quarterly data, both dependent and explanatory variables. TDT collections typically decline from the 1st quarter of the calendar year (Jan-Mar) through the 4th (Oct-Dec), and ascend with increases in FL jobs and the CPI. The ascent, of course, is militated by erosion in FL jobs and supported by periods of enhanced inflation (see the CPI column).

VisitSpaceCoast.com

Dummy variables which assume a value of 0 or 1, the latter occurring when the quarter of data entered corresponds to the quarter of seasonally variation, are utilized to estimate the magnitude of seasonal impact. With all four quarters indicating seasonal variation, three dummies are needed, and in this analysis correspond to the first three quarters of the year. Essentially the coefficients estimated on these dummies, assuming statistical significance, modify the model’s intercept term. In the fourth quarter of the year, the intercept is unaltered. A regression analysis was performed on equation (3) utilizing the data found in Appendix B. The empirically estimated relationship between ALL TDT collections and the explanatory variables is revealed in equation (4).

(4) TDT = -19,162,454.96 + 1.91*(FL Jobs) + 21,723.99*(CPI) + 1,769,696.42*(D1) + 1,061,964.61*(D2) + 525,876.95*(D3) Summary Output 5.1 from the regression run can be viewed below. The R2 indicates a model that explains about 90 percent of the variation observed in the dependent variable. The F-test indicates that the overall model is statistically significant, while the t-stats (more specifically, their p-values) reveal all the coefficients estimated are also statistically significant. To begin to explore equation (4), please note that in the 1st quarter of the year, D1 takes a value of 1, while D2 and D3 equal 0. This serves to uplift the intercept term by about 1.77 million more than the 4th quarter of the year (the benchmark intercept), strictly due to the seasonal strength connoted by those three months. In a similar vein, the 2nd quarter would expe-

SUMMARY OUTPUT 5.1 Regression Statistics Multiple R 0.953 R Square 0.907 Adjusted R 0.887 Square Standard 457,796.7 Error Observations 29 ANOVA df Regression 3 Residual 75 Total 78 Coefficients Intercept -2,160,815.21 FL Jobs - SA 1.91 CPI - SA 21,723.99 D1 1,769,696.42 D2 1,061,964.61 D3 525,876.95 68

VisitSpaceCoast.com

SS 8.24595E+12 1.64646E+11 8.41059E+12 Standard Error 2,197,060.04 0.44 9,308.93 236,977.50 251,294.16 245,608.14

MS 2.7E+12 2.2E+09

F 1252.07

Significance F 6.01594E-64

t Stat -8.72 4.34 2.33 7.47 4.23 2.14

P-value 0.00 0.00 0.02 0.00 0.00 0.04

Lower 95% Upper 95% -23,707,419.9 -14,617,490.0 1.0 2.8 2,467.0 40,981.0 1,279,471.1 2,259,921.7 542,123.0 1,581,806.2 17,797.8 1,033,956.1

rience a 1.06 million comparative boost, while the 3rd quarter would derive a 526K increase. In the 4th quarter of the year, the intercept would not be altered as the respective dummies would all equal 0. With respect to the slope terms, a quarter-to-quarter increase in FL jobs of 50,000 would entail an increase in TDT of 95,550 (i.e., 1.91 x 50,000). During the period studied – 2016-Q1 through 2023-Q1 – FL jobs increased, on average, by about 50,000 per quarter, and that trend will be utilized later in the forecasting section. In terms of the CPI, each one unit increase in the index augments bed tax collections by about 21,724 dollars, so a 2.5 unit increase, which is about an 0.8 percent increase in the current CPI reading, would constitute an FIGURE 13. PREDICTED VS ACTUAL TDT COLLECTION BY QUARTER; 2016(1) - 2023(1)

9,000,000

Figure 13 showcases the model’s predicted vs. actual values for ALL TDT collections for the period 2016(Q1) through 2023(Q1). Please note that as compared to the earlier RevPAR centered Nowcast, these are quarterly not monthly data points and the scales are different. In 2023-Q1, FL jobs amounted to 9.6682 million, and the CPI registered at 301.331. With D1 = 1, that yielded a model predicted value of $7,622,207. The actual value of TDT collections for 2023-Q1 was $8,193,418. That is the observed discrepancy between red and blue-dashed lines in Figure 13. Estimated regression models will yield predicted values where the residuals represented – the discrepancy for each data point – sum to zero. TDT2023-Q1; FY2023-Q2 = -19,162,454.96 + 1.91*(9,668,200) + 21,723.99*(301.331)

6,750,000

+ 1,769,696.42*(1) + 1,061,964.61*(0) + 525,876.95*(0) = $7,622,207

4,500,000 2,250,000 0

upward movement of about 54,300. And in fact, an increase in the CPI from quarter to quarter of 0.8 percent will be stipulated in the forecasting section.

5.1 Forecasting 9/2017 9/2018 10/2019 8/2020 6/2021 9/2022 2/2023

Predicted ALL TDT (S)

Actual ALL TDT (S)

Forecasting quarterly TDT collections for the ensuing five quarters can be attempted with the necessary FL jobs and CPI inputs.

CHART 3. ALL TDT FORECASTS BASED ON MACRO MODEL ASSUMPTIONS; 2023(Q3)–2024(Q3) Quarter & Year 2023-Qtr 3 2023-Qtr 4 2024-Qtr 1 2024-Qtr 2 2024-Qtr 3

FL Consumer NonFarm Price Employment Index FL Jobs CPI - SA SA 9,768,200 306.17 9,818,200 308.62 9,868,200 311.09 9,918,200 313.58 9,968,200 316.09

Dummy VariableQ1 D1

Dummy VariableQ2 D2

Dummy VariableQ3 D3

MACRO DATA FORECAST

STR DATA FORECAST

0 0 1 0 0

0 0 0 1 0

1 0 0 0 1

$6,674,571 $6,297,418 $8,216,263 $7,658,110 $7,272,033

$5,686,821 $5,527,457 $7,972,445 $7,111,957 $6,415,653

VisitSpaceCoast.com

As alluded to earlier, there is a 7-year pathway of FL jobs increasing, on average, by about 50,000 per quarter. Until newer information informs an analysis, that benchmark is extended into the future. With respect to the CPI, inflation over the past 18 months has been more volatile than in the years prior to COVID, but Federal Reserve Policy combined with supply-chain loosening has brought recent inflation readings back towards more normal ranges. This forecast will assume a 0.8 percent increase in the CPI from quarter to quarter, which would approximate an increase of 3.24 percent on an annual basis. To unpack the model, let’s examine the 2nd quarter of 2023, which is the 3rd quarter of the 2023FY. FL jobs were estimated at 9.7186 million, with a CPI reading of 303.351. With D2 = 1, this would yield a forecasted value of TDT collections of $7,052,030. TDT2023-Q2; FY2023-Q3 = -19,162,454.96 + 1.91*(9,718,600) + 21,723.99*(303.351) + 1,769,696.42*(0) + 1,061,964.61*(1) + 525,876.95*(0) = $7,052,030 Since the actual TDT quarterly figure ended up just under $6.6 million, this estimated amount was off by about 7 percent. Forecast data and results are provided in Chart 3 for 2023 Quarter 3 through 2024 Quarter 3. For comparison purposes, the 70

VisitSpaceCoast.com

STR™ data forecasts, aggregated into quarterly form, are provided as reference. Please note that the macro model is typically more ebullient in its forecast than the STR™-based model.

6.0 Epilogue As the COVID slowdown recedes from memory, and the post-COVID tourism rush appears to be slowing, this investigation of the changes that occurred in Space Coast TDT revenues is timely and hopefully illuminating. An assessment of TDT revenue changes, by locale and type, and the integration of both STR™ and macro data to forecast near-term collections, are key deliverables of this report. Forecasts rely upon key inputs along with the belief that the underlying structural model driving the relationship between the dependent and explanatory variables is still valid. But for external and organic reasons, markets change. Forthcoming events – a 4-star hotel, a return to the moon, an exciting new aquarium and sustainability hub – are likely to alter some of the dynamics of Brevard’s tourism market. On the other hand, the boom experienced over the past 24 months could partially represent a tourism sugar high as the combination of stimulus dollars and the retreat of COVID fueled pent-up travel expenditures.

APPENDIX A. NOWCASTING REGRESSION, STRTM DATA (OCT 2016–APR 2023)

Month & Year

Actual TDT Collections Hotel/Motel

Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19

$708,629.09 $742,508.99 $751,854.85 $853,229.30 $1,052,193.69 $1,296,238.30 $1,028,974.41 $870,515.59 $887,633.08 $997,060.70 $741,854.42 $698,206.46 $898,095.15 $846,619.02 $837,052.07 $932,377.03 $1,181,310.96 $1,436,555.97 $1,104,203.30 $894,387.44 $968,975.03 $1,109,938.88 $1,008,991.24 $728,472.35 $761,883.02 $767,786.46 $816,479.91 $876,175.20 $1,162,681.34 $1,497,905.59 $1,125,016.93 $1,021,342.99 $1,107,123.03

Revenue Census Occupancy Avg Daily per Days Imputed TDT Imputed Yield # of Rate OCC Room Rate Available in Imputed Rev Actual TDT/ Rms % ADR Rm Month *0.05 Imputed TDT Available RevPAR 58.800 64.900 60.300 67.100 77.300 83.100 74.500 68.200 71.600 75.100 65.700 54.800 73.800 70.800 66.700 72.100 80.900 85.900 74.300 64.400 71.300 74.100 69.900 56.900 56.600 59.900 60.300 62.300 77.700 84.900 74.400 68.600 71.900

*Source: STR Data, TDO, author’s calculations

$95.76 $97.28 $96.64 $101.25 $120.30 $127.94 $114.93 $104.13 $104.62 $108.45 $100.92 $100.18 $103.95 $105.23 $103.94 $109.60 $129.54 $140.20 $123.25 $112.33 $114.13 $118.01 $115.09 $105.58 $105.91 $104.99 $104.77 $109.48 $130.37 $138.17 $122.59 $115.97 $119.21

$56.33 $63.14 $58.25 $67.97 $92.97 $106.38 $85.63 $71.00 $74.80 $81.43 $66.26 $54.88 $76.68 $74.50 $69.31 $78.98 $104.75 $120.39 $91.53 $72.31 $81.40 $87.42 $80.45 $60.12 $60.00 $62.91 $63.20 $68.18 $101.31 $117.26 $91.22 $79.54 $85.66

8,844 8,843 8,846 8,846 8,846 8,846 8,846 8,846 8,846 8,846 8,846 8,969 8,671 8,758 8,758 8,857 9,007 9,007 9,007 9,124 9,124 9,124 9,124 9,124 9,236 9,236 9,236 9,237 9,237 9,237 9,237 9,237 9,237

31 30 31 31 28 31 30 31 30 31 31 30 31 30 31 31 28 31 30 31 30 31 31 30 31 30 31 31 28 31 30 31 30

$772,183 $837,521 $798,683 $931,957 $1,151,378 $1,458,608 $1,136,224 $973,502 $992,521 $1,116,511 $908,511 $738,328 $1,030,583 $978,707 $940,876 $1,084,265 $1,320,877 $1,680,747 $1,236,616 $1,022,622 $1,114,040 $1,236,311 $1,137,740 $822,802 $858,948 $871,555 $904,759 $976,157 $1,310,121 $1,678,852 $1,263,899 $1,138,802 $1,186,862

91.77% 88.66% 94.14% 91.55% 91.39% 88.87% 90.56% 89.42% 89.43% 89.30% 81.66% 94.57% 87.14% 86.50% 88.97% 85.99% 89.43% 85.47% 89.29% 87.46% 86.98% 89.78% 88.68% 88.54% 88.70% 88.09% 90.24% 89.76% 88.75% 89.22% 89.01% 89.69% 93.28%

Continues on the next page VisitSpaceCoast.com

APPENDIX A. NOWCASTING REGRESSION, STRTM DATA (OCT 2016–APR 2023)

Month & Year

Actual TDT Collections Hotel/Motel

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22

$1,268,500.07 $960,159.02 $660,446.19 $883,988.27 $884,296.18 $918,439.48 $1,051,640.01 $1,269,966.82 $775,157.32 $292,875.01 $628,680.27 $620,666.14 $813,784.33 $563,005.84 $584,382.39 $565,294.45 $533,747.72 $500,829.56 $566,474.11 $711,506.60 $1,157,044.22 $1,119,751.54 $1,119,547.13 $1,247,141.20 $1,478,436.94 $949,964.40 $960,218.64 $1,000,245.74 $920,717.41 $1,049,518.08 $1,055,628.82 $1,505,460.06 $1,809,841.84

Revenue Census Occupancy Avg Daily per Days Imputed TDT Imputed Yield # of Rate OCC Room Rate Available in Imputed Rev Actual TDT/ Rms % ADR Rm Month *0.05 Imputed TDT Available RevPAR 76.900 61.700 53.300 63.700 67.800 65.000 72.900 85.100 54.900 22.300 39.800 44.900 47.600 42.000 42.200 43.300 41.100 39.000 43.000 53.700 69.100 68.000 64.000 68.600 73.000 55.600 52.800 58.200 58.300 61.300 61.900 76.000 81.200

*Source: STR Data, TDO, author’s calculations 72

VisitSpaceCoast.com

$124.96 $113.23 $104.51 $108.14 $107.43 $109.25 $115.58 $139.04 $130.15 $84.43 $101.25 $102.16 $107.59 $98.86 $94.94 $92.10 $92.16 $88.49 $87.89 $97.20 $111.59 $116.00 $114.98 $120.82 $135.22 $114.28 $109.30 $112.73 $110.73 $114.34 $117.66 $144.23 $159.46

$96.12 $69.92 $55.72 $68.94 $72.87 $71.02 $84.24 $118.27 $71.45 $18.79 $40.29 $45.85 $51.26 $41.56 $40.02 $39.84 $37.87 $34.55 $37.76 $52.21 $77.13 $78.88 $73.60 $82.88 $98.75 $63.57 $57.66 $65.65 $64.61 $70.11 $72.84 $109.66 $129.51

9,237 9,237 9,237 9,237 9,237 9,231 9,235 9,235 9,214 9,183 9,488 9,597 9,835 9,864 9,982 9,982 9,982 10,106 10,106 10,162 10,162 10,466 10,470 10,753 10,621 10,621 10,634 10,554 10,556 10,607 10,582 10,582 10,582

31 31 30 31 30 31 31 29 31 30 31 30 31 31 30 31 30 31 31 28 31 30 31 30 31 31 30 31 30 31 31 28 31

$1,376,184 $1,001,069 $772,028 $987,038 $1,009,650 $1,112,479 $1,205,832 $1,583,724 $1,020,427 $258,823 $592,521 $660,034 $781,420 $635,419 $599,219 $616,408 $567,028 $541,202 $591,484 $822,365 $1,214,882 $1,279,615 $1,194,418 $1,381,373 $1,625,677 $1,046,524 $950,392 $1,073,949 $1,057,136 $1,152,668 $1,194,729 $1,624,591 $2,124,236

92.18% 95.91% 85.55% 89.56% 87.58% 82.56% 87.21% 80.19% 75.96% 113.16% 106.10% 94.04% 104.14% 88.60% 97.52% 91.71% 94.13% 92.54% 95.77% 86.52% 95.24% 87.51% 93.73% 90.28% 90.94% 90.77% 101.03% 93.14% 87.10% 91.05% 88.36% 92.67% 85.20%

Continues on the next page

APPENDIX A. NOWCASTING REGRESSION, STRTM DATA (OCT 2016–APR 2023)

Month & Year

Actual TDT Collections Hotel/Motel

Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23

$1,552,050.99 $1,397,585.82 $1,342,985.74 $1,541,461.13 $1,255,179.43 $1,105,906.66 $1,235,362.09 $1,222,704.47 $1,263,779.27 $1,372,968.15 $1,769,751.77 $2,065,118.01 $1,605,410.22

$146.02 $134.87 $135.63 $142.13 $132.29 $129.25 $131.54 $135.56 $132.12 $137.52 $172.46 $186.94 $163.58

$106.31 $89.20 $93.66 $104.52 $89.46 $79.89 $89.71 $89.81 $85.80 $94.95 $140.63 $153.33 $114.21

10,734 10,734 10,734 10,734 10,742 10,742 10,742 10,911 10,442 10,442 10,442 10,335 10,335

30 31 30 31 31 30 31 30 31 31 28 31 30

$1,711,697 $1,484,083 $1,508,020 $1,738,972 $1,489,518 $1,287,268 $1,493,680 $1,469,875 $1,388,682 $1,536,775 $2,055,842 $2,456,232 $1,770,541

90.67% 94.17% 89.06% 88.64% 84.27% 85.91% 82.71% 83.18% 91.01% 89.34% 86.08% 84.08% 90.67%

*Source: STR Data, TDO, author’s calculations

In fact, late summer 2023 has marked a flatlining of TDT revenues as aggregate year over year collections for the months of May through August have actually declined slightly ($8,122,456 in FY 2021-22 vs $8,091,460 in FY 2022-23). This does seem to support the notion of a tourism high, as does the fact that the STR™ forecasts for RevPAR are descending. One other confounding factor includes the MGT contribution factor, which after appearing to stabilize early in the year, is now arcing back upwards. This implies that a specific level of Hotel/Motel TDT collections now supports a larger overall tax accrual. But perspective is in order. Compared to the same 4-month period in FY 2018-2019, TDT collections in FY 2022-23 are 43.6% higher, implying a yearly average growth rate for that time window of 9.5%. For the Hotel/ Motel segment, average per annum increases for the same 4-month block have registered at 5.5%. These are and have been healthy

average growth rates. Whether the current slow-down is merely a temporary pause in what recently has seemed to be an inexorable climb in TDT collections, or in fact, represents a more fundamental post-COVID reset, remains to be seen. The next 6 to 12 months should provide clarity on the trajectory of future forecasts.

7.0 References FRED Economic Data. Federal Reserve Bank of St. Louis. <https://fred.stlouisfed.org/>; various datasets accessed summer 2023. STR™ . <www.str.com> weekly, monthly, and quarterly reports; accessed summer 2023. Tourism Development Office. Brevard County Board of County Commissioners. <https://www.brevardfl.gov/TourismDevelopmentOffice>; accessed summer 2023. U.S. Bureau of Labor Statistics. <www.bls.gov>; employment and cpi reports accessed summer 2023. VisitSpaceCoast.com

APPENDIX B. MACRO FORECAST MODEL DATA (JAN 2016–MAR 2023) Quarter & Year

Total TDT Collections ALL TDT ($)

FL NonFarm Employment FL Jobs - SA

Consumer Price Index CPI - SA

Dummy Variable-Q1 D1

Dummy Variable-Q2 D2

Dummy Variable-Q3 D3

2016-Qtr 1 2016-Qtr 2 2016-Qtr 3 2016-Qtr 4 2017-Qtr 1 2017-Qtr 2 2017-Qtr 3 2017-Qtr 4 2018-Qtr 1 2018-Qtr 2 2018-Qtr 3 2018-Qtr 4 2019-Qtr 1 2019-Qtr 2 2019-Qtr 3 2019-Qtr 4 2020-Qtr 1 2020-Qtr 2 2020-Qtr 3 2020-Qtr 4 2021-Qtr 1 2021-Qtr 2 2021-Qtr 3 2021-Qtr 4 2022-Qtr 1 2022-Qtr 2 2022-Qtr 3 2022-Qtr 4 2023-Qtr 1

4,168,502 3,324,926 3,043,099 2,680,427 4,301,044 3,567,538 3,052,692 3,219,868 4,833,768 3,870,858 3,658,450 3,066,268 4,947,790 4,284,114 3,725,747 3,525,935 4,388,154 2,220,456 2,931,126 2,513,351 4,293,845 5,242,868 4,889,243 4,390,878 6,954,787 6,297,656 5,687,783 5,408,144 8,193,418

8,286,167 8,352,100 8,431,900 8,473,767 8,524,267 8,568,633 8,546,667 8,643,033 8,702,700 8,757,167 8,812,400 8,852,367 8,901,333 8,942,833 8,982,800 9,031,233 9,043,067 8,052,000 8,421,133 8,569,567 8,695,167 8,821,333 9,001,633 9,146,633 9,244,767 9,375,867 9,511,300 9,582,467 9,668,200

237.689 239.590 240.607 242.135 243.839 244.120 245.287 247.238 249.322 250.679 251.686 252.711 253.414 255.220 256.085 257.888 258.803 256.315 259.239 261.045 263.734 268.558 272.887 278.707 284.894 291.536 295.496 298.525 301.331

1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1

0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0

0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0

From 1987 through 2022, the Space Coast Tourism Development tax yielded collectively about $272 million in revenues. Together, the next five fiscal years (i.e., FY’s 2023-2027) should generate in the neighborhood of $130 million in bed tax accruals. The implications for TDO operations and policy are both far reaching and significant. 74

VisitSpaceCoast.com

Delta_SKY#3_8x10.5_#4.pdf

9/12/18

1:44 PM

CMY

Don't worry about missing your ﬂight or getting stuck in trafﬁc. Arrive early and start your cruise vacation walking down the beach. Port Canaveral is a world-class cruise port located 45 minutes from Orlando, laid-back and best of all, uncongested.

VisitSpaceCoast.com

/ Florida's Space Coast

Florida’s Space Coast Office of Tourism VisitSpaceCoast.com Florida’s Space Coast