Tourism marketing agency Visit Orlando, credited with helping build Central Florida into the nation’s top vacation place, might have misappropriated nearly $20 million in tourist-tax revenue by improperly classifying the money as private rather than public funds, Orange County auditors say.

“It’s very hard to parse out from the records which funds are which,” said assistant comptroller Wendy Kittleson, who raised the possibility Tuesday during a three-hour public discussion of Visit Orlando’s spending practices with the Board of County Commissioners.

She stressed the $19.9 million figure was an estimate based on Visit Orlando’s private revenues dating back to 2019, the year county leaders signed the agency’s funding contract. The agency’s public revenues are subject to stricter spending rules than its private funds.

The guess flabbergasted Casandra Matej, president & CEO of Visit Orlando, who appeared before the commission to respond to a withering comptroller’s examination of her organization, which gets over $100 million a year in hotel and short-term lodging tax revenue to promote tourism.

“That was not in the audit,” she said, referring to the 66-page document released last month by Comptroller Phil Diamond’s team of examiners. “I mean we’re willing to look at all of our dollars. There’s not an issue there. It’s just that was the first time we heard it.”

While Visit Orlando gets some private contributions from tourism companies, most of its operating budget comes from taxpayers.

“They’re making some assumptions,” Matej said of the auditors.

The scrutiny comes amid a growing debate about Visit Orlando’s role and the use of tourist tax revenues in Central Florida and around the state. Legislators have sought to shift some of the money designated for marketers like Visit Orlando toward needs like transportation and affordable housing, but those efforts have so far failed amid heavy pressure from the tourism industry.

Diamond said examiners reviewed Visit Orlando’s reported $8.98 million in private funds in 2023 and determined about $3.54 million or 39% should have been classified as public money generated by the county’s Tourist Development Tax, the 6% surcharge on the cost of a hotel room or other short-term lodging. They then figured Visit Orlando might have misclassified a similar percentage in other years.

Private funds are “totally unlimited” and can be spent on anything the agency wishes, Diamond said.

But Visit Orlando’s TDT funds can only be spent on tourism promotion.

Visit Orlando received $105 million from the tourist tax in 2023.

Commissioners directed Visit Orlando to square its funding and report back in December.

Diamond said his team intends to look at Visit Orlando’s records from 2019 when its current funding agreement was signed through 2024 to come up with a more precise analysis.

Commissioner Kelly Martinez Semrad said it is critical for Orange County to manage its revenues wisely.

“We just got Doged,” said Semrad, a tourism economics professor at the University of Central Florida, referring to a team of auditors from the newly created Florida Department of Governmental Efficiency, or DOGE, who are conducting a state probe of county spending. “If we’re doing business in ways that don’t look transparent to the public…then we are going to be criticized and used as a state example of a county who cannot manage its TDT.”

 

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She listed some questionable spending the comptroller’s audit cited in its probe of Visit Orlando, including car allowances and office furnishings.

Restauranteurs and hoteliers spoke up for Visit Orlando at the meeting.

Trina Gregory, owner of Se7enBites restaurant and bake shop in Orlando’s Milk District, credited the agency for helping her business earn recognition from the Michelin guide. “It’s put us on the map,” she said. “Let’s be real. We wouldn’t have done it without the incredible support and vision of Visit Orlando, which gave us a platform to showcase our restaurant and amazing food.”

She was among a dozen people who told commissioners Visit Orlando has made the world know that Orlando is more than theme parks.

Other speakers at the meeting hoped commissioners would keep fighting to diversify uses for tourist tax dollars for public transit and affordable housing.

Matej defended Visit Orlando’s work, saying she considered the audit’s criticisms to be an opportunity to get better.

“In most cases, we’ve already taken action and or were in the process of taking action” to address the audit’s findings, she said.

Matej cautioned that Central Florida has fierce competition for visitors. “Orlando’s leadership in the tourism sector is not guaranteed, and we must continue to market and sell our destination with the same ambition and innovation that earned us this position,” she said.

shudak@orlandosentinel.com