Florida Trend | Florida's Business Authority

Tourism 2009

D.T. Minich
D.T. Minich, executive director of the St. Petersburg/Clearwater Convention & Visitors Bureau, says a marketing effort attracted more than 1 million visitors from the Orlando area last fall. He is shifting the group’s marketing efforts farther north now. [Photo: Mark Wemple]
An economic slowdown, a drop in consumer and corporate confidence and reduced airline capacity have combined to create the most challenging business environment the tourism industry has faced since just after the 2001 terrorist attacks.

“I think people are just very skittish and very afraid to make a lot of travel plans and do a lot of travel with the uncertainty of the economy,” says Paul Catoe, president and CEO of Tampa Bay & Co. (formerly the Tampa Bay Convention & Visitors Bureau).

Florida hotels began to feel the impact of the economic crisis in September, when statewide occupancy rates dropped 10.5% and revenue collected on the average hotel room fell 12.6%, according to Smith Travel Research. The historically slow month for tourism was made worse by a spate of hurricane activity, election year jitters and a reduction in flights to the region by many airlines. Theme park business also slowed in the third and fourth quarters of 2008, when the parent companies of Universal Orlando, Walt Disney World and SeaWorld and Busch Gardens reported dips in attendance and revenue.

Scaling Back

Americans may be scaling back on their vacation spending, but they’re not opting out entirely. According to a recent survey by the Orlando-based marketing firm Ypartnership and the Travel Industry Association:
 71% of “active leisure travelers” said they plan to take an overnight trip more than 50 miles from home during the next six months — unchanged since the last such survey a year earlier.
 76% of those surveyed said they will book a packaged
vacation to save money.
 75% plan to spend less overall.
 73% intend to spend less on food, beverages and entertainment.
 67% plan to stay fewer nights.

Convention and visitors centers across the state report that groups that have booked events are not canceling their meetings but that attendance is down and will likely continue to be for some time.

Rich Maladecki, president of the Central Florida Hotel & Lodging Association, says hoteliers in the Orlando area are predicting a 2% to 4% decline in 2009 occupancy as business and leisure travel weakens.

While overseas visitors have provided some cushion to the softening domestic tourism market, the spread of the financial crisis around the globe and the strengthening of the dollar against the euro and the pound will likely dampen international enthusiasm for travel. The Department of Commerce predicts that international arrivals will decline by 1.6% over the next year, and the Travel Industry Association is predicting a 3% drop in overseas travel to the U.S. this year. Bud Nocera, president and CEO of Visit Florida, says he believes Florida will “still see business” from the U.K., Ireland and other parts of Europe in coming months “but not at the same levels.”

Tourism officials are responding with aggressive marketing campaigns aimed at Florida residents and domestic travelers in traditional core markets in the Northeast and Midwest.

> D.T. Minich, executive director of the St. Petersburg/Clearwater Convention & Visitors Bureau, says an advertising campaign aimed at Orlando residents drew more than 1 million residents to the Gulf Coast region last fall. “Orlando was our top market for the summer. Now we’re shifting to up north — traditional core markets like New York, Boston, Chicago, Indianapolis, Minneapolis and Philadelphia,” says Minich.

“Tourism is one of the hardest things to forecast. The great barometer for the future of the tourism industry is consumer confidence. You should look for a rise in the national consumer confidence levels as a signal for the return to normalcy in the tourism industry.”
— Bud Nocera, president and CEO of Visit Florida

> The Monroe County Tourist Development Council, meanwhile, recently approved $500,000 in “emergency” funding for an advertising blitz.

> To better compete with larger Florida destinations, the St. Lucie Tourist Development Council is teaming up with local businesses on advertising. Michelle Valvano, owner of Perfect Drive Golf Villas, a 160-unit resort at PGA Village, says it was an “easy decision” to partner with the county. “With them I can do so much more than I can do on my own.” The county is also pursuing a partnership with Grand Bahama Island to find a way to increase tourism trade for the two destinations.

> Jorge Pesquera, president and CEO of the Palm Beach County Convention and Visitors Bureau, says his organization is overhauling its marketing strategy completely. With the new slogan, “20 Distinct Towns — One Palm Beach County,” the bureau will highlight the wide variety of experiences available within the county. The bureau has also decentralized its group sales efforts and hired representatives in New England, Washington, D.C., and Atlanta. The bureau also plans to step up its research to find out how it can better target potential visitors.

Hotel and resort operators are also altering their strategies. Walt Disney World was offering customers who booked hotel reservations by Dec. 20 seven nights for the price of four. At some Florida locations, Marriott has been giving away $50 gas cards to customers who stay at least three consecutive nights. Rosen Hotels is offering $40-a-night specials — in addition to food and attractions discounts — through this month at four of its Orlando hotels. Still other hotels are offering complimentary meals or tacking on golf packages at no additional cost.

Tourism officials hope they’re the first to emerge from the economic storm. “A lot of economists think the tourism sector will be the first to bounce back because if people are able to access credit and have a little spending power that will be the first thing they’re going to want to do. They don’t want to sit at home and keep an eye on Wall Street,” says Nicki Grossman, president of the Greater Fort Lauderdale Convention & Visitors Bureau. “They’re going to want to sit on the beach.”

Hotel Health

The Travel Industry Association reported a 3.6% decline in business travel in 2008 and projects a 2.7% decline in 2009. Leisure travel is expected to decline by 1.3% this year. Here’s how hotels in six regions of Florida fared through September 2008.

Revenue Per Available Room
(Jan.-Sept. 2007 vs. Jan.-Sept. 2008)
2007 2008 Change
Florida Keys $145 $135 -6.6%
Miami-Hialeah 116 119 2.6
Fort Lauderdale 88 86 -2.4
Orlando 74 74 -0.4
Tampa-St. Petersburg 67 65 -2.6
Jacksonville 63 58 -6.9
Florida $79 $76 -3.0%
Occupancy (Jan.-Sept. 2007 vs. Jan.-Sept. 2008)
2007 2008
Miami-Hialeah 73.0% 73.1%
Florida Keys 71.5 70.2
Orlando 69.7 68.3
Fort Lauderdale 67.9 66.6
Jacksonville 66.4 61.7
Tampa-St. Petersburg 63.8 59.8
Florida 66.1% 63.4%
Source: Smith Travel Research
Raymond James Stadium
The Super Bowl could generate a $450-million windfall.

Bright SpotsSports Bonanza

When the economy ground to a halt last fall, the Tampa Bay Rays provided an unexpected economic boost for downtown St. Petersburg and many Pinellas County hotels as fans flocked to Tropicana Field to watch six playoff and two World Series games. Local businesses will get another shot in the arm when Super Bowl XLIII comes to Tampa’s Raymond James Stadium on Feb. 1. How much money can a Super Bowl generate? The 112,000 visitors who attended Super Bowl XLI in Miami in 2007 spent an estimated $280 million during the week before the game, according to an analysis by the Sports Management Research Institute in West Palm Beach. The research firm estimated an overall economic impact of the event at $463 million.