Sales tax data reflect seasonal ebb, flow of tourist traffic

Dr. Rick Harper

Dr. Rick Harper

By RICK HARPER, Ph.D.
rharper@studeri.com
The Christmas holiday shopping season is behind us, and retailers across North Florida are in the midst of the winter doldrums.

From Pensacola to Fort Walton Beach to Panama City to Jacksonville, retail sales will be at a low ebb until spring breakers brighten up stores in March. Even the government and education metros of Tallahassee and Gainesville register their low points in the first two months of the year. But down south, warm weather means that things are hopping.

For years, Florida has reported out taxable sales generated by various types of retail establishments in our 67 counties every month. Those sales are sometimes summed up across types of retailers or across counties in order to provide insight into the economic performance of local areas. These data can be used to paint a picture of some of the drivers of economic activity.

In the colder northern tier counties, tourist visitation patterns mean local hotel revenue is much lower in January and February than it is in June and July. In Panama City, the seasonal peaks and troughs are quite large. There, the sales tax collected by hotels during June and July run at about double the average monthly collections for the year. In January and February, collections run at about half the average monthly collections for the year.

The same pattern holds for Santa Rosa, Okaloosa and Walton counties. The more mature and diversified economy of Escambia sees summer hotel revenues that spike sharply, but the peak in July is at just under double the annual average.

This summer spike is reversed in Florida’s more southerly metro areas. In Collier County, home to snowbird destination Naples, hotel sales in the January-to-March period run from 40 to 90 percent higher than the average month, while June and July run about a third less than the monthly average, and are among the four lowest months of the year.

While this might have been just what you expected, the differences are large, and they spill over into other sectors. Our visitors, and the chefs who cook their meals, evidently shop at our grocery stores. Taxable sales at grocery stores are 37 percent higher than the average month in July in Panama City, and 15 percent lower in January. A similar pattern, albeit not as pronounced, holds in Escambia, Santa Rosa, Okaloosa and Walton counties. In contrast, December through April show taxable grocery store sales in Collier County ranging from 13 to 24 percent higher than the monthly average.

Northern tier metros Panama City and Fort Walton Beach are among the most seasonal of Florida’s 22 metro areas. Places like Naples, Cape Coral and Punta Gorda also show strong seasonality, but their high seasons occur when it’s cold in the northern states and warm in South Florida.

Employment in Florida’s tourism and retiree sectors has been growing over time relative to the rest of the Florida economy, helped by both growth in visitor numbers and by the graying of the baby boomers. While job growth is a big positive, the increasing importance of jobs serving these demographic segments poses challenges for our wage structure and job quality in future years. Many of these positions will pay less than the average job in the U.S. economy, yet they are Florida’s high-growth occupations. The answer lies in providing our youngsters, and our existing workforce, with the training and education opportunities to be well qualified for the jobs they aspire to hold.

Dr. Rick Harper serves as director of the Studer Institute, a Pensacola, Florida-based organization that seeks citizen-powered solutions to challenges the community faces. He also directs the University of West Florida’s Office of Economic Development and Engagement in Pensacola.

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