Haynie Warns of Hotel Tax Slump

"Given the uncertainties surrounding the war in Iraq, we may see similar declines during the next few months," Haynie says. Her office had budgeted $9.2 million for February. The actual number was 14.5% off the mark.

The monthly tax collection figures are watched closely by hotel developers and investors as a barometer of the area's hospitality industry's health. Guests at the county's estimated 113,000 hotel and motel rooms are taxed 5% on their total bill. The bulk of the money is used to pay down debt on the $750 million, one-million-sf expansion of the 20-year-old Orange County Convention Center.

The February tax collection decline was supported by new occupancy numbers from the Orlando/Orange County Convention & Visitors Bureau and Smith Travel Research Inc. of Hendersonville, TN. Occupancy throughout Central Florida inns fell to 64.8% from 70.5% in February 2002.

Average room rates overall dropped to $98.39 from $101.52 last year. But average rates at tourist-oriented hotels increased $2.38 a night to $64.07 and declined by $11.39 per night to $127.58 at business-class hotels.

About 9% of business travelers have canceled trips to Orlando since the war began March 19, according to an industry survey by Orlando-based Yesawich, Pepperdine, Brown & Russell. The March 24-26 survey involved 651 travelers. About 72% said the ongoing US conflict in Iraq wouldn't affect their travel plans.