Domestic tourism will support Florida economy despite international weakness

This year Florida will achieve a highly symbolic and economically significant milestone. For the first time ever more than 100 million people will visit the Sunshine State; sunbathing on its sandy beaches, riding its thrilling rollercoasters, and resting at local hotels. The 104 million visitors - made up of 88 million out-of-state, 4 million Canadian, and 12 million overseas visitors - is 30% higher than during the downturn, and equates to about five visitors for every Florida resident. 

The dollars spent by these visitors - nearly $90 billion this year - have helped Florida recover from its deepest recession on record. Importantly, the Sunshine State will continue to benefit from the seasonal economic activity generated by nonresidents. For one, a strengthening U.S. economy, rising wealth of American households, and lower gasoline prices should boost both the number of domestic tourists and the amount they spend while visiting the state, helping support Florida's leisure & hospitality, transport, and retail industries - sectors most dependent on tourism. 

Secondly, many other industries in the state will benefit from increased nonresident activity, which will shore up tax revenues (state and local government), drive commercial real estate and transportation investment (construction and manufacturing), and manifest in more vacation home sales (real estate and finance). The only cloud on the otherwise very sunny outlook is international activity in the state. This segment has been an important contributor to the economy in recent years, but may come under increasing pressure from weaker currencies of countries key to Florida's international demand and lukewarm global growth. Still, any international weakness should be more than offset by domestic strength, with Florida's highly consumer-dependent economy expected to grow by 3.5% and 4% this year and next, respectively, handsomely outpacing the nation.