Tuesday, March 17, 2009

Elaine Fitzgerald Knows What Her Places Are Worth!

Here's a virtually complete Florida-centric article, of special interest to those of us who call the Sunshine State home. It's a hard economic rain that's falling now from those sunny skies, sad to say.

Please recall that forward-looking economic indicators indicate that much worse such weather is coming our way.

One wonders if Ms. Elaine Fitzgerald, proprietress of rental units in Lauderdale, can hold to her pricing discipline as times get really bad. For inflationistas, please note a "mere" 20% pay cut for executives at an Amelia Island Resort. How far we are from the inflationary recessions of 1973-5 and 1980 and 1981-2!

From the online WSJ:

Austerity Tide Hits Florida Beaches
Tourism Industry Suffers as Businesses Cancel or Scale Back Events in the Sunshine State


AMELIA ISLAND, Fla. -- Luxury resorts are accustomed to unusual requests. But Amelia Island Plantation was surprised to get this one from a corporate event planner worried about a function appearing too extravagant: could the resort drop the word "island" from its address?

Only a scattering of people dotted the sand near the Ocean Drive strip in Miami Beach in late January. In the last quarter of 2008, the number of out-of-state visitors to Florida dropped 13.6% from a year earlier, the largest decline since the quarter following the Sept. 11, 2001, attacks.

Another potential client said it wouldn't consider any hotel with the words "spa" or "resort" in its title. A construction trade association canceled its 400-person annual convention at the resort scheduled for June, citing similar worries.

"I think they were concerned about the appearance that they were having the convention at a resort on a beach when companies were laying people off," said Mark Chesney, president of Travel Planners International Inc. of Marietta, Ga., who was organizing the event. Instead, the meeting will be held at a conference center in Atlanta.

For tourism officials in Florida, the drop-off at Amelia Island Plantation is an ominous sign that the tourism industry, the state's lifeblood, is in for a brutal year. Executives at the resort say they have lost about $750,000 in revenue since January, as businesses and trade groups shun the negative publicity associated with anything even remotely resembling a boondoggle.

In the final quarter of 2008, the number of out-of-state visitors to Florida dropped 13.6% from a year earlier, the largest quarterly decline since the quarter following the Sept. 11, 2001, terrorist attacks. Many tourism officials expect a double-digit-percentage drop in visitors in 2009, at a time when the state is reeling from other economic woes, including being among the hardest hit areas of the real-estate meltdown.

In Fort Lauderdale, owners of beachside rental properties that used to sell out months in advance still have vacancies as the spring-break season approaches.

A drop in tourist-related revenue hits especially hard in a state that has no personal-income tax and relies on tourism for a significant portion of its sales-tax revenue. In 2008, 82.5 million people visited Florida, according to state officials. Of the state's 18.8 million residents, nearly one million work in jobs linked to tourism.

Out-of-state visits are down at tourist destinations throughout the state, from the south Florida beaches popular with European travelers to the northern part of the state, which is especially popular with tourists from other parts of the Southeast. Many tourists who do visit the state are now making reservations at the last minute, "waiting for value," said Richard Goldman, chairman of the board of Visit Florida, a state-funded agency that promotes state tourism.

Nicki Grossman, president of the Greater Fort Lauderdale Convention and Visitors Bureau and past chair of Visit Florida, said every county in Florida has reported a drop in hotel-tax revenue. In January, Broward County's hotel occupancy rate was 71.3%, down from 90% in January 2008.

Elaine Fitzgerald, owner of five beach-area properties in Pompano Beach, said she has rented only 70% of her units for March. Usually, the month is sold out by the beginning of the year. She has reduced her minimum stay from a week to three days but is reluctant to discount rates, figuring it is important to "maintain the type of clientele that keeps our places attractive."

"Perception is reality," says Ms. Fitzgerald. "I know what my places are worth."

On Amelia Island, 30 miles northeast of Jacksonville, the impact of the tourism decline is particularly acute. Roughly 36% of the county's sales-tax revenue is generated by tourism.

More than half a million people annually visit the island, with its 13-mile coastline and historic downtown district. Nature lovers come to the island to witness loggerhead turtles nesting in the sand and whales swimming just off the coastline.

The island's two premier resorts -- Amelia Island Plantation and a Ritz-Carlton -- have lost a combined $6.2 million of convention and retreat business since the fall, according to Gil Langley, president of the Amelia Island Convention & Visitors Bureau.

Last month, BB&T Corp., a bank based in Winston Salem, N.C., that has received $3.1 billion in bailout money, canceled a March retreat at the Ritz for its top sales people. BB&T spokeswoman A.C. McGraw called the cancellation "a prudent business decision."

Amelia Island Plantation is an expansive resort with four golf courses, more than 20 tennis courts, a spa and condos that fetch up to $800 a night. Among the groups who recently canceled events there are a California food distributor, a Georgia construction trade association and an Ohio hardware manufacturer, according to the resort.

"We're hoping that eventually this hysteria goes away," said Visit Florida's Mr. Goldman, who is also the ocean resort's chief marketing officer. The resort's entire salaried staff recently took a 20% pay cut. The loss of business has rippled throughout the island's economy. Four restaurants on the island have closed in the past three months, Mr. Langley said. A designer-shoe retailer on the grounds of Amelia Island Plantation reports that business is down at least a quarter.

In past years, booking a room the week before the Concours d'Elegance -- an annual classic-car show that was held on the island over the weekend -- would have been next to impossible.
"I got three phone calls today from hotels saying they still have rooms available," Mr. Langley said three days before the event's scheduled start. "That's never happened before."

1 comment:

  1. Going by the latest reports regarding the hotels in Bangalore, the hospitality industry of the city is about to see serious growth and development in the coming times. Bangalore was one of the cities that had seen unprecedented growth and development owing to the boom of the IT sector and before long it became one of the most important IT hubs of not only India but also of the world. As such the number of business travelers to Bangalore also increased and hence important names in the hospitality industry opened up exclusive business hotels in Bangalore. Soon Bangalore became one of the most important commercial hubs of India and hence it saw rapid infrastructural growth and development. However, following the economic slump, not only the IT sector and overall business suffered, but also the hospitality sector received setback. Most obviously the occupancy rates for the budget hotels in Bangalore declined. However, the recent reports predict that India is still the place to be as far as development from all ends in concerned. Business will soon be bustling in India and the hospitality industry has also somewhat overcome the slump and the reports predicting growth have come as a breather.