Tampa Bay’s red-hot tourism market has cooled. Here’s why:

After a red-hot rebound in the post-COVID tourism market, the Tampa Bay region’s hospitality industry shows signs of cooling.

Tourist tax collections are off, compared to a year ago, for consecutive months in both Hillsborough and Pinellas counties, and the monthly hotel occupancy rate has dipped more than 5% in Pasco County.

Industry leaders, however, seem unfazed, attributing some of the declines to expanded options for travel as the rest of the world welcomed visitors after the pandemic.

“Last year was a record-breaking year, so gravity was bound to take affect at some point,” said Ron Barton, assistant Hillsborough County administrator for economic prosperity.

Data shared with the Hillsborough Tourist Development Council Thursday showed bed tax collections dropped 2.3% in May and 5.5% in June. But, even with those two months of year-over-year declines, Hillsborough is on pace for a 14.4% annual increase that would smash last year’s record 12-month total of $57.8 million.

In Pinellas County, the drop in bed tax revenue began in April and continued in May and June after the calendar year began with double-digit increases. Despite three months of declines, the county collected $97.5 million over the 12-month period ending June 30, a 4.85% increase.

Both Hillsborough and Pinellas charge a 6% tax on overnight accommodations to finance tourist-related marketing and construction projects. Though collections can fluctuate based on the number of hotels and room rates charged by hoteliers, the tourist tax data is a commonly used measure of localized tourism activity

In Pasco, the County Commission increased its bed tax rate from 4% to 5% last year, so year-over-year comparisons can appear skewed. The county reported a 24.4% increase in collections for the month of May, compared to 2022. The higher tax rate would account for a 20% growth rate, so the numbers indicate county collections are ahead of the prior year.

That didn’t hold true for the month of June, however, when the monthly tax collections grew just less than 12.5%.

Hotel occupancy rates also dropped for May and June in all three counties compared to a year ago, and Florida’s statewide numbers are off as well.

“Occupancy is down across the board. It’s down across the state. It’s down across the U.S. It’s the net progression of coming out of COVID and other (international) markets opening up. Consumers have options now whereas two years ago they didn’t,” said Adam Thomas, executive director of Pasco’s tourism agency, Florida’s Sports Coast.

“Last year was a definite outlier,” said Santiago C. Corrada, president and CEO of Visit Tampa Bay. “Revenge travel, and restrictions on some areas and countries, were definite factors. With the world now fully open and welcoming visitors after a long hiatus, we have seen more stability in occupancy percentages.”

Revenge travel, a term popularized on social media, refers to the public’s pent-up demand to travel following the pandemic.

Corrada noted Hillsborough continues to outpace its pre-COVID performance of 2019 in terms of revenue generated for the hotel industry.

“And we expect to finish the fiscal year on an all-time high.” he said.