FY 2025-26 PCTSM Q-1 Update
Virtually all industries must navigate through the ups and downs (peaks and troughs) of business cycles. Large and small businesses must adjust to these disruptions at some point; the tourism industry is no different. Polk County Tourism and Sports Marketing (PCTSM) has faced both macro and micro economic challenges over the years, including 9-11, the Great Recession, and Covid 19, all at the macro level. The most notable microeconomic disruption was arguably the combined impact of the closure of Cypress Gardens and Grenelefe Resort, coupled with the Cleveland Indians and Kansas City Royals moving to Arizona during the Great Recession recovery era.
With the latest Tax Collector’s report (12-8-26) just in for the first quarter (Q1) of FY 25-26 (September-November sales), PCTSM’s FYTD revenue fell below the same time-period in 2024 by more than 11.7%, and 7% below our initial FY 2025-26 budgeted forecast. PCTSM had been monitoring the warning signs and planning for this slide for several months. Fortunately, we had forecasted this downward trend during the last half of the 2025 calendar year, including developing a corrective action plan. Admittedly, the revenue variance was more than anticipated, but fortunately it took place during one of our shoulder seasons (traditionally slower times of the year). The current FY 25-26 revenue shortfall (7% vs. our forecasted budget) equates to approximately $383,702 in hard dollars.
We have identified several reasons for this downturn, both microeconomic and macroeconomic in nature, which is also being felt by destinations nationwide, including those in Florida. These disruptions make it tougher for all Destination Marketing Organizations (DMOs) to move the needle in a positive direction. The following factors have been the primary reasons for the slowdown in travel revenue over the last few months.
- After reviewing a mind-numbing amount of local, state, and national research, and subsequently analyzing the data, the most notable difference between Q1 of 2024 (September-November) and Q1 of 2025, at least in Polk County, was the impact of two hurricanes: Helene and Milton. Combined, they elevated revenues from September through December in 2024. Displaced residents and relief workers artificially increased demand throughout Central Florida for months afterwards. As a result, having not experienced a hurricane in 2025, demand and revenue returned to a more normal pattern, versus the hurricane induced bump we experienced in 2024. This non-hurricane phenomenon hasn’t happened since 2015. The artificial hurricane bump is historically followed by a drop the following year, as we did in 2025.
- October revenue in 2024 increased by more than 7% over the same month in 2023. Without the impact of the 2024 hurricanes, revenue in October 2025 dropped by 10.2%.
- Revenue in November 2024 increased 13%, compared to 2023, again as displaced homeowners and relief workers from the severely damaged west coast of Florida sought temporary accommodations in Polk County. In November 2025, revenue dropped by 13.8%, returning to a more normal non-hurricane level.
- Official tax collector revenue data from December 2025 is not available at this writing but based on preliminary data from STR and other trusted sources, a similar downward trend is anticipated in Polk’s tourism revenue for the month.
- Nationally, according to S. Travel, the longest Federal Government shutdown in U.S. history, 43 days (October 1-November 12), resulted in $6.1 billion in losses for the U.S. economy. On average, the U.S. saw 88,000 fewer trips per day, a clear indication about how quickly uncertainty and disruption suppress travel demand and activity. The impact of the shutdown, however, is definitely not limited to those 43 days, it has continued through this writing.
- Nationally, consumer uncertainty is playing a major role in the tourism industry’s slowdown. That uncertainty is understandable. Inflation is making it increasingly difficult for some consumers to make ends meet. Interest rates have also been sticky on the downward side, and the Covid savings surplus ($1.3 trillion) is gone. Regardless, there is consumer uncertainty from multiple sources, which inevitably results in a reduction in spending, especially discretionary spending on leisure travel.
- Having a smaller impact on this perfect storm is a factor that’s microeconomic in nature. During the fall of 2024, the increase in demand can be attributed in part to Avelo’s expansion to eight total destinations in/out of the Lakeland Linder Airport. That champagne effect helped elevate demand during Q1 of 2024 compared to 2023.
In summary, based on PCTSM’s economic research, empirical evidence, and input from Downs St. Germain Research, PCTSM’s contracted research firm, a primary factor in this national slowdown is macroeconomic in nature. Collectively, these factors have driven consumer uncertainty, which has created a vicious cycle of consumer angst and pullback in the marketplace. There’s also been discussion about a “K” shaped U.S. economy, which simply means the wealthier are continuing to spend, even as prices increase, while the lower economic strata are pulling back. This phenomenon is showing up in the hotel industry as well; upper scale properties are doing well, while mid-scale and lower end properties are struggling…for now. Streamsong, for example, has told us they’re having a record year. Upper scale properties in Orlando have also been doing very well; TDC collections in Orange County have been the anomaly in the Central Florida region. Some have argued that Universal’s new Epic Universe may have stabilized Orange County’s tourism revenue. The good news is, even during a temporary slowdown, people still prioritize travel; it’s almost a birthright. This pullback is also showing up in shorter stays. For example, instead of a 4–5-day vacation, visitors are shortening their stays to quick 2–3-day getaways to save money. We’re also seeing lower in-market spending. Instead of splurging on a higher end meal at Arabella’s in Winter Haven, it’s more likely they’ll opt for mid-range options like Glory Days or even Culvers. People, however, are still traveling, albeit for shorter getaways and by reducing their total spend while in market.
PCTSM began a targeted campaign in September in anticipation of the tourism industry’s slowdown. Like all marketing campaigns, the period between planning, activation, and actual results takes time. An increase in demand will have an impact on ADR, which in turn will drive revenue. For numerous reasons, it’s our belief that the winter/spring of 2026 will bring an uptick in visitation and spending. Ultimately, revenue will reverse course and put Polk County’s tourism industry on a more favorable track moving forward.