Q&A in the News
October 23, 2007
Bad data skews bed tax estimates
Hum the Beach Boys’ tune “Wouldn’t It Be Nice” as you read this column.
Wouldn’t it be nice if Lee County collected more than $2.29 million in bed taxes in July?
Actual collections totaled less than three-quarters of that.
Wouldn’t you like to know how I got that bed tax total—one that isn’t in the same ballpark with the one reported by the county’s Tourist Development Tax Audit Department?
Glad to tell you: I did some math with Earl Quenzel at Fort Myers-based advertising and Web marketing agency, Quenzel & Associates.
Before joining the agency founded by his wife, he was a marketing exec for the company that operated the Sundial and South Seas resorts, among others. He worked for AT&T before that.
Like me, Quenzel has doubts about some statistics reported at the past two monthly meetings of the county Tourist Development Council.
Earl did some calculations and compared the results with actual bed tax collections.
To make a long column shorter, here is his simplest match problem for July:
$45,914,491: That’s the county visitor bureau’s estimated total spending for short-term rental of commercial lodgings, campsites, etc. Multiply that by 0.05 to reflect the 5 percent bed tax, and the result is $2,295,725.
Actual bed tax collections totaled $1,474,314 or 64.2 percent of that bigger, hypothetical bed-tax haul.
Quenzel also tried a more involved approach that used the bureau’s reported market share for hotels, motels and condos; average travel party size; average number of nights stayed; and average daily rate. I won’t go into all the details; however, the result only widened the gulf between estimated spending and actual tourist tax dollars collected.
“Those guys are off upwards of 30-40 percent—in their own reporting,” Quenzel said, adding: “That calls all of their data into question for me.”
“Those guys” are Kennebunk, Maine-based Davidson Person Associates. As of July, the firm assumed full responsibility for data collection, analysis and reporting for most of the statistics the tourism council uses in deciding how to spend bed tax dollars.
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