From 1999 to 2004, tourism from the U.K. edged up nominally. But the number of visitors from key eurozone nations dropped a drastic 28%, accounting for 246,000 fewer visitors. What gives?
PRICE ISSUE: The disappearance of affordable beach hotels is helping to keep German tourists away.It's a quarter past eight on a recent summer evening at Southwest Florida International Airport. Some 250-plus mostly German passengers arrived half an hour ago from Frankfurt on a Boeing 767. Limbs, stomachs and brains heavy from the 10-hour flight, they stare at the slow passport-swiping, picture-taking and fingerprinting pantomime by the two immigration officers in their booths. As conversations stall, the would-be visitors occasionally glance at a reprint of the U.S. Constitution adorning the west wall of the neon-lit, cavernous hall. It isn't until an hour later that one of the immigration officers finally wishes the last passenger of Condor flight 4058 a pleasant stay in the U.S.
Longer lines and more careful screening have become part of the picture since 9/11, but is the new post-9/11 welcome scaring away Florida visitors from Europe?
No, say Florida tourism boosters, quickly pointing to hefty growth figures for visitors from the Old World over the past two years. The number of German tourists, for example, rose by nearly 20% from 2003 to 2004 and is nearly 90% of what it was in 2001.
But inside the growth charts are other trends that should raise eyebrows: While the number of visitors from the 12 wealthy nations that use the euro as a currency has begun to recover from the shock of 9/11, the rate of increased tourism doesn't come close to matching the strengthening of the euro versus the dollar, suggests the Travel Industry Association of America, U.S. tourism's main trade body. Compared with four years ago, not long after the euro was introduced, Europeans enjoy some 50% more buying power in the U.S. Next to that figure, tourism increases pale.
Eurozone Visitors to Florida (in thousands)199920002001200220032004% Change from 1999Germany435325303202225265-39%France133160139134110122-8%Italy1291511179675113-12%Spain8210177669177-6%Netherlands979798556753-45%TOTAL*876834734553568630-28%*Excluding Ireland, Belgium, Austria, Finland, Greece, Luxembourg and Portugal
In addition, building comparisons only around 2001 and the 9/11 effects may be misleading: The total number of visitors from Germany, France, Italy, Spain and the Netherlands is 86% of what it was in 2001, but only 72% of the total in 1999, the peak year. That translates to some 246,000 fewer visitors to Florida.
The trends in eurozone tourism worry some Floridians. "For one, tourism is a passport to peace," says Abraham Pizam, dean of Rosen College of Hospitality Management at the University of Central Florida. "But foreign tourists also spend more than domestic tourists, and the average length of stay is longer."
Those observations dovetail with data from Visit Florida, the state tourism agency. In addition: While making up less than one-fifth of all overseas visitors to Florida, eurozone tourists frequently come during summer, when other tourists are avoiding Florida; they often bring their children, and they shop till they drop -- nine out of 10 overseas visitors indulge in retail sprees while in Florida. They also tend to be a captive clientele -- three out of four overseas visitors stay in Florida only while in the U.S.
What's more, tens of thousands of Europeans were so taken by their Florida experience and real estate prices that they later decided to buy a home or condo in the Sunshine State.
So why are eurozone visitors staying away?
German travel executives, responsible for bringing the biggest batch of eurozone tourists to Florida, point at homegrown economic problems, shifts in global tourism and trends inside Florida.
"I don't believe that George Bush is an obstacle for package travelers," says Peter Dorner, president and CEO of New York-based New World Travel, a large wholesale travel agency that caters to the German-language market. Rather, Germans "have become more cautious with spending. The economy did better in the late 1990s. Now people can't be as sure anymore what might happen next year."
A bigger concern for package travelers, Dorner says, is the disappearance of affordable hotels on the beaches. The condo construction boom in Miami, Fort Lauderdale, Naples, Sarasota and St. Petersburg has whittled away at the number of affordable hotels that are the backbone of European package tours. "Affordable two- and three-star hotels in North Miami Beach and Sunny Isles are about to disappear," he says. "Expensive hotels and condos are taking their place. The package tourism that used to come to Sunny Isles is staying away, and so are a lot of Germans. It will stay this way because the cheap hotels on the beach aren't there anymore. I won't get the masses into the Ritz-Carlton or the Delano."
Dorner also points at rising competition from other destinations such as Spain and the nearby Caribbean. The Dominican Republic and Cuba, for instance, have enjoyed continuous growth and record-setting numbers of European visitors over the past couple of years and expect another boost of at least 9% for European travelers this year. These markets are offering deals to all-inclusive travelers that European tour operators aren't getting in Florida anymore, Dorner says.
WOOING EUROPEANS: The 54-room Ocean Five, which manager Kevin McLaney (above) says did more than half its business with Europeans before 9/11, is fighting to get Old World customers back. Director of sales Annabelle Grajales takes on a heavy travel schedule, pitching her outfit to tour operators at tourism fairs in Europe. During the first three months of this year, Grajales visited travel shows in Spain, Italy, Finland and Germany and plans to attend a fair in London in November. McLaney says that now maybe one-third of Ocean Five customers are European, and he hopes to be back to the one-half benchmark by next summer. But it's an uphill struggle. "They're very rate conscious," he says. "Florida is part of the Caribbean, and competition with other destinations is hard. There are more resort-style accommodations now. Europeans go to Cuba, Aruba or Jamaica."Indeed, the drop of eurozone visitors from 1998 to 2003 was considerably steeper in Florida than overall in the U.S. While Florida during that period saw a decline of 52.1% by German visitors -- who make up the largest contingent of eurozone travelers -- the drop was only 38% for all of the U.S.
The result is gentrification of European tourism here: The average annual household income of German visitors to Florida rose 35% from 1998 to 2003, to $106,000, according to Visit Florida. The eurozone middle class now prefers Gran Canaria or Cuba, with only wealthier Europeans coming to Florida.
There are other "atmospheric" issues, says Pizam, including new U.S. regulations and procedures that make it more difficult to come to the U.S. The second is America's image abroad. Visit Florida, for instance, attributed the decline of German visitors in 2002 to "Germany's opposition to the U.S.-led war in Iraq."
"The feelings toward the United States throughout Europe, even among best friends such as the U.K., isn't as positive as it was before 9/11," says Pizam. "There are people who do not travel to the U.S. because they have bad political or social feelings. The European polls that track attitudes have seen an improvement, but a lot is still negative."
...But the British Are Still Coming
Britons, who account for a hefty two-thirds of all European visitors to Florida, are behaving differently from their continental neighbors. Nearly one in 12 British citizens traveled to the U.S. last year, says Sean Tipton, spokesman for the Association of British Travel Agents. And the number of British visitors to Florida this year is expected to approach the pre-9/11 record of 1.65 million.
The British economy isn't doing appreciably better than the German, nor has the British pound appreciated more than the euro. So why are the British traveling to the U.S. like crazy, while the Germans are staying away?
There are four differences, says Tipton. One, having experienced terrorism at the hands of the IRA for decades, the British are somewhat jaded when it comes to terrorism hysteria.
Two, airfares are near record lows. Some U.S. carriers, gambling on a rise in U.S.-U.K. travel over the past three years or so, considerably increased their trans-Atlantic capacities. But the growth didn't materialize as quickly as anticipated, and the overcapacity forced U.S. airlines and their British competitors to discount.
Three, British real estate is booming. Many Britons are leveraging their homes and flats to do a little consumer spending. "A lot of people are going (to the U.S.) just for shopping," Tipton says. One bit of fallout: Although the British account for only 15% of the European Union's population, they're responsible for 40% of EU credit card debt.
And four, Britons are, well, more American than their fellow Europeans. Says Tipton: "When the German economy isn't doing well, Germans consider not traveling. The British would rather drop dead than give up their holidays. Tourism is one of the few industries here which is recession-proof."
Buying Trends (2004-05)Where They're From
Foreign real estate
buyers in Florida*United Kingdom33%Eurozone21%South America21%Mexico, Central America and Caribbean8%Canada7%Asia4%Eastern Europe3%Other2%*Doesn't total 100% because of roundingInvestors vs. Second-Home Buyers
(Share of investors among buyers)British52%German35%Where They Buy
European real estate
buyers in Florida*Orlando33%Naples-Fort Myers21%Miami-Fort Lauderdale21%Sarasota8%Tampa-St. Petersburg7%West Palm Beach4%Rest of Florida3%What They Buy
European real estate
purchases in Florida*Home, townhouse65%Condominium, apartment35%*Includes buyers from eurozone countries and United KingdomSource: Florida Association of Realtors, 2005 foreign buyer survey