Oil Price Hikes Could Mean Big Shifts For Florida’s Crucial Tourism Industry

TALLAHASSEE, Florida — The rising price of fuel spurred by the Iran war has pushed a Florida vacation out of reach for many families this summer, even as luxury travel remains strong.

The ongoing conflict, which increased the average per-gallon price of gasoline in Florida by about $1.50 to almost $4.50 a gallon over the past year according to AAA, has already led to a slowdown in reservations for cruises departing from Port Canaveral. And things are only expected to worsen after the shutdown of Spirit Airlines last week, which struggled with finances for years, leading some to assess that increasing fuel costs were the final straw. The Florida-based air carrier operated dozens of gates at Orlando International Airport, offering cheap flights that made trips to the country’s most popular vacation destination affordable for people across the country. The cheap flights and the Orlando airport’s relatively short drive proximity to Canaveral also helped keep cruise liners full of passengers.

All of that boils down to an uneasy summer and an uncertain fall in the Sunshine State, where amid a rebound in tourism post-Covid, Florida’s out-of-town economic engine is crucial to its financial health.

Michael Schottey, vice president of membership, marketing and communications at the American Society of Travel Advisors, said demand from the state’s post-Covid travel boom already made plane tickets and hotel rooms more expensive, and the recent increase in fuel prices has become the tipping point for families on a budget.

“It’s worse for the people who already had it bad, and it’s better for people who already had it good,” Schottey said. “And the stock market keeps going up.”

Florida is annually ranked the most popular vacation destination in the U.S., with more than 143 million visitors in 2025, and its tourism industry surged in recent years as Gov. Ron DeSantis pushed back on pandemic restrictions while other states increased them. Tourism is, by far, the state’s largest industry, providing tens of thousands of jobs and generating billions in sales tax revenue that supports a significant chunk of the state budget.

Such a heavy reliance on visitors led the Legislature to make budget cuts after the Great Recession of 2008. Schottey said the current market, facing the impact from the Iran conflict, is still going strong. But it has left many travelers looking for a cheaper vacation closer to home.

“People are going to travel, but the caliber of travel will depend on the economy,” Schottey said.

Marketing for the state is left to Visit Florida, an agency overseen by DeSantis that receives about $80 million from the state budget every year. The governor enlisted Visit Florida to help after tourism dropped during the first several months of the pandemic. Visit Florida President and CEO Bryan Griffin said the state’s tourism industry has remained strong, and his agency is continuing a balanced marketing approach in reaching visitors who drive and fly.

"This year, data shows that Florida has maintained its place as the #1 domestic travel destination, and we have grown our market share of Canadian travelers to the U.S.,” Griffin said in a statement. "In terms of value, the latest data shows that Florida ranks #1 for value against our key competitors.”

The conflict in Iran, including footage of a drone attacking a popular hotel in Dubai, also led many people to scratch international travel plans out of concerns for safety. Florida Restaurant and Lodging Association CEO Carol Dover said an FRLA board member recently told her about seeing an increase in guests booking rooms on usually slow days, saying guests were choosing drivable vacations rather than overseas flights.

“He went from not expecting to have a full house to … packed full,” Dover said. “They said, ‘We’re going to play it safe.’”

As with previous conflicts affecting the oil industry, sky-high gas prices from the Iran war will eventually deflate, and Dover said she believes those days will be soon.

“Our tourism is resilient, and we are so blessed to be in a state with 850 miles of the most beautiful beaches in the world,” Dover said. “People are saying we won’t go to Europe or Dubai but we will stay on the beach.”

Schottey said a state that relies so heavily on tourism should be concerned when an entire segment of travelers can no longer afford to visit. “There’s always sticker shock right after the increase,” Schottey said. “But as we’ve seen with oil time and time again, it’s a very long process to recover from.”

Kyle Bohman, a Melbourne-based travel adviser serving Florida’s Space Coast, said high travel costs have made even free vacations unaffordable for some people. He brought up a company that gave free family cruise trips to employees, only to find out some could not afford the journey to Port Canaveral, where their ship was to embark.

“They’re still finding it difficult to justify the cost of getting here,” Bohman said. “People are extended these offers and opportunities, but when they put everything together in the family budget, it’s not all that affordable.”

Bohman said cruise lines were already struggling to fill Canaveral-based ships when popular discount carrier Spirit Airlines shut down last week. The airline offered daily flights to Orlando International Airport for just $64, making Port Canaveral cruises affordable to people from across the country. With the airline gone, travelers within a day’s drive to the port will still take a cruise but forgo the hotel stay the night before the ship departs. Many of the travelers who live at least a two-day drive away may not make the trip.

“Spirit’s market was extensive. It made it relatively easy for a family of four to be able to come to Orlando,” he said. “But the concept of low-cost travel has fallen by the wayside.”

Schottey said hotels and restaurants catering to budget travelers have already seen reservations drop. Now, those businesses are scrambling to come up with discounts to bring them back.

“Suppliers are scrambling to offer discounts to entice consumers,” Schottey said. “They’re the places that didn’t have any trouble until the cost of living started to go up.”

The U.S. Department of Transportation in March announced a partnership with the Great American Roadtrip, Inc. meant to inspire people to visit national monuments over the summer as the country celebrates its 250th birthday. Schottey said while he hopes the American public sees more historic sites, many will not be able to afford the trip.

“When the Great American Roadtrip is about high gas prices, or a car that’s more expensive to maintain than ever before, or a beach resort on the coast of Florida that’s more expensive than it was a couple of years ago — that is all straining on the American family,” Schottey said.

As the self-advertised top vacation state in the country, Florida will likely see a sharper impact from rising costs than other states. But Schottey said tourism is down nationwide. An analysis released by the lodging industry this week showed hotels in Miami and Kansas City that were hoping to fill up during the FIFA World Cup games in June and July still had plenty of vacancies.

“We looked at the World Cup and said this was going to be great and it would be big for tourism,” Schottey said. “But inbound travel is just struggling.”

Bohman expected summer travel to remain profitable due to an abundance of reservations that were made by families six months ahead and well before the oil conflict. But people who usually start planning fall and winter trips now are getting cold feet as they calculate rising costs. And those who can afford pricier trips are only giving the industry reason to keep prices high for the long term. Many air carriers recently tacked on an increased fuel surcharge on tickets, which may linger if there is no decline in demand.

“If there’s enough stickiness with the fuel charge, they’ll just make it part of the cost,” Bohman said. “If they don’t see a serious dip in demand, the prices will stay the same.”