Orange County’s tourism tax declines in April after a record March

Tourism tax collections fell nearly 10% in April compared to April 2023, the steepest year-on-year decline in a month since February 2021, when the world’s travel industry was still reeling from the COVID-19 pandemic.

Orange County’s occupancy tax, a 6% surcharge on a hotel room or other short-term lodging, generated $30.3 million in April, down 9.9% or $3.3 million from April 2023 collections That month marked the beginning of a five-month period. through August 2023, during which collections were lower than the same month of the previous year.

Nevertheless, the 2022-2023 fiscal year was a record year for the tourism development tax, also known as TDT.

The tax generated $359.3 million over a twelve-month period between October 1, 2022 and September 30, 2023.

Through the first seven months of the 2023-2024 fiscal year, collections are about $3.3 million behind last year’s record pace, but $32.1 million ahead of the budgeted forecast.

“It is likely that the timing of spring break and Easter holidays has impacted our collections,” said Comptroller Phil Diamond, whose office tracks TDT’s revenues. “Last year Easter fell in April. This year it fell in March.”

TDT generated $40 million in March, the highest ever in a single month.

While discussing March’s TDT largesse, Diamond had warned that March’s gain could be April’s loss.

“This is the downside,” says Diamond, who often likens the up and down volatility of TDT earnings to a roller coaster ride.

But the Twilight Zone Tower of Terror at Disney’s Hollywood Studios might be a better comparison for the sudden drop from March. TDT had not fallen as fast or as far in a month since February 2021, when collections totaled $10.3 million, down $17 million from February 2020.

In a press release this morning, Diamond compared the TDT of March and April 2023 with the last few months.

His calculations showed that combined March/April collections were down $1.8 million, or 2.4%, from 2023 levels.

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