Abstract
Taxes such as the Florida Tourist Development Taxes are popular in the United States. Earlier research on rate increases for these bed taxes identified a surprising short-term decline in pre-tax lodging spending. We address the surprise with hotel data that include price and quantity measures. Results show that when Florida counties increase the rate, room rental quantity reductions can occur. As prices charged by operators generally do not change, the Florida lodging industry faces the risk of potential loss of revenue when rate increases are enacted. This risk partially explains why counties have not moved quickly to the statutory maximum.
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Arguea, N.M., Hawkins, R.R. Florida tourist development tax changes and the risk to hotel revenue. J Revenue Pricing Manag 21, 685–690 (2022). https://doi.org/10.1057/s41272-022-00386-7
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DOI: https://doi.org/10.1057/s41272-022-00386-7