Florida tourism sags. Will political controversy further hurt business? – Palm Beach Post
Comrades across the world, be warned that Florida is not for you.
That was the June 27 message posted on Twitter by the state’s former governor and current U.S. senator, Rick Scott.
“Let me give you a travel warning if you’re a socialist, communist or someone who believes in big government,” Scott said in a video he shared on the social media platform. “I would think twice — think twice — if you’re thinking about taking a vacation or moving to Florida.”
The missive drew significant commentary on the platform, and not all of it was supportive of Scott’s travel line in the sand.
“I’ll pass this message onto as many Canadian snowbirds as I can,” a Twitter user posted. “I hope they spend their good money on a place where they would feel welcomed. At least you let us know where we stand and u don’t need our tourist $.”
More:Dear Canadians: Don’t mind Rick Scott. Floridians are the socialists
Actually, Florida could use more tourists — and their dollars.
Since heralding a record-setting comeback from the pandemic shutdown last year, and kicking off 2023 with a robust first quarter, data obtained by The Palm Beach Post shows many of the state’s 4,500-plus hotels saw business sag in the past three months.
Figures compiled by the premiere hotel analytics firm STR show that after a strong start to the year, fortunes retreated in the spring as the three most-watched benchmarks — occupancy rates, the average daily rate per room and revenue per available room — all dropped in April and May in comparison to the same months in 2022. Occupancy rates began their slide in March.
“The year started off very strong, so the early months were good,” said Daryl Cronk, director of hospitality analytics at STR’s parent company, CoStar Group. “We have seen a little bit of a softening in the last couple of months. There’s a couple things going on. Part of it is there is increased competition.”
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People are going back on cruise ships, others are heading to Europe
That competition is coming largely from the rebound in cruise-ship bookings with the lifting of the global COVID health emergency, plus the desire of Americans to return to European hotspots this summer.
“There’s a lot more competition both domestically and all the international trips,” said Cronk, adding that the trend is not too worrisome. “We are watching it but not overly concerned by the trend yet.”
Peter Ricci, one of Florida’s top tourism analysts, said the pronounced drop in the gauges for South Florida hotels, especially in Miami-Dade County, was disconcerting.
“If you look at the trends, we’re down everywhere and we’re not looking good,” said Ricci, director of the hospitality and tourism management program at Florida Atlantic University.
Florida tourism is what goes up and rarely comes down — barring a Great Recession or global pandemic
The notion that tourism powerhouse Florida would see declines in any sector, barring a crashing U.S. economy or an international pandemic, is surprising.
For much of the past decade, the state has posted year-over-year, record-busting visitor numbers. In 2022, VisitFlorida said the state hosted 137.6 million travelers, the most in its history.
There’s reason to think more record-smashing would follow this year.
Carnival Cruise Line said it is seeing unprecedented levels of reservations and deposits. The bullishness over the industry’s business prospects explains why Carnival, Norwegian Cruise Line and Royal Caribbean Group were the top three performers in the S&P 500 during the second quarter, according to the financial publication Barron’s.
While packed cruise ships will show increases in visitor numbers, analysts say they can dampen the need for hotel stays, as many passengers fly in and out without reserving more than one night’s worth of lodging.
Abroad, the United Nation’s World Tourism Organization similarly reports that international tourism is on pace to reach “pre-pandemic levels,” with the number of people traveling to Europe in the first three months of 2023 reaching 90% of what the figure was in 2019. The trend line was expected to continue increasing this summer.
The momentary sag in hotel-room demand also partly speaks to the slow recovery in international visitors to Florida from the global coronavirus economic shutdown three years ago. VisitFlorida said the estimated 9.8 million people that traveled to Florida from Canada, Europe, the Americas and “overseas markets” in 2022 was still almost 30% fewer than in 2019.
The rush to cruise ships and to see the Eiffel Tower and other Old World sites also points to what some call “Florida fatigue.” That term speaks to people who have flocked to Sunshine State beaches, golf courses and spas multiple times since the pandemic reopening and now sense a been-there, done-that desire to go somewhere else.
“As we are moving beyond the COVID pandemic, things that weren’t available because of restrictions, limited travel internationally, these things that weren’t available for a couple of years are now available, and there is some pent-up demand for those trips,” Cronk said. “We’re seeing that this summer.”
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Other destinations’ lures are proving to be formidable competition for the Sunshine State. Analysts say that’s largely why hotel stays in Florida saw an uncharacteristic decline — not simply slower growth — in late spring.
Occupancy rates dropped in March, April and May. The average daily rate for those rooms fell in April and May, as did revenues on all available rooms for those months as well.
Bernardo Neto, general manager of The Ben, a Marriott Autograph Hotel property in West Palm Beach, said 2023 has been strong despite a business dip in April and May when contrasting those months to the same ones in 2022. But Neto said last year’s results were “an anomaly” as the travel season extended past the winter season as people sought to travel as pandemic rules elapsed.
Todd Herbst, a West Palm Beach restauranteur and a partner in Big Time Restaurant Group, said he has seen the same trend.
“Our sales are off from last year. Pretty much all restaurants are,” Herbst said. “One of our theories is that last year was unusually strong. It was wonderful. And we all thought, ‘There’s no more season. This is great.’“
This year, business is starting to resemble the typical up-and-down seasonality that defines South Florida, said Herbst, whose restaurants include Elisabetta’s, Louie Bossi’s and Rocco’s Tacos.
Political ‘noise’ an unhelpful factor this year, others say
While analysts and proprietors blame competition for the tourist dollar for the recent slump in Florida hotel stays, Ricci and others cite one more “ingredient” — politics.
The NAACP, the League of United L: Latin American Citizens, or LULAC, and The Human Rights Campaign, the largest LGBTQ advocacy organization, have issued “travel advisories” on Florida tourism. Although not boycotts, the statements have been perceived as guidance, if not directives, for Black, Hispanic and LGBTQ people to spend their vacation dollars elsewhere.
In addition, Gov. Ron DeSantis’ high-profile battle with Walt Disney World has supercharged the rhetoric, with social conservatives accusing the Central Florida theme park giant of grooming and sexualizing children. Images of neo-Nazis demonstrating outside Disney’s Kissimmee property rifled through social media last month.
STR’s Cronk said it’s “hard to quantify” whether the political atmosphere is impacting travel to Florida.
But in Broward County, tourism officials are keeping a running list.
“We’ve lost nine conferences in the past two months, all because of politics or state policy,” said Stacy Ritter, president and CEO of the Greater Fort Lauderdale Convention & Visitors Bureau.
Ritter said past experience points to a variety of reasons why the county might lose an organization’s conference business. Sometimes the price tag is too expensive, and at other times, the culprit is timing if the convention center is booked.
“So there are a variety of reasons why, but this is the first time that we’re seeing the political environment pop up as a reason why groups aren’t coming here,” she said.
“I’ve got a farmworkers association. They work with training migrants. They mentioned the immigration bill which was passed. I’ve got an educational leadership conference, which specifically cited concerns about what the governor is doing in the education space. I’ve got a group that cited the NAACP travel advisory as the reason.”
Ritter said she hasn’t totaled how much money the county has lost out on because of the canceled events, but she estimates it is in the $8 million range.
Ricci noted that he has received 10,000 to 15,000 emails, texts, social-media direct messages and other communications in the past few months from the thousands of people who have earned FAU’s tourism-focused certificate.
He said these professionals contacting him work in hotels, restaurants, car-rental agencies and other travel companies in and outside of Florida and they are telling him the political “noise” is a factor and the friction is “not helping.”
“Let’s just say the political environment is another reason people are not coming to South Florida,” Ricci said.
Tourism is too important to state economy to give anyone reason not to come to Florida
What he is being told, Ricci said, is that amid all the surging competition from U.S. and international tourism, Florida should not be giving anyone a reason to second-guess or rethink a vacation in the Sunshine State.
Florida tourism, Ricci adds, is always sensitive to bad news, whether it’s widespread coverage of a hurricane’s destruction in a corner of the state, a shark bite on a beach or a line of sargassum stretching across the shoreline.
“Next thing is you’re like, ‘You know what, honey, let’s go to Myrtle Beach,’ or ‘How about we go to Atlanta this year?’” Ricci said. “What everyone is telling me is it’s not helping. None of the noise is helping.”
Officials at Palm Beach County’s tourism promoter say the momentary dip in hotel statistics this spring is easily explainable. The county lost a major conference that “grew so much” that the county could not accommodate its needs and so it took its business elsewhere, said Milton Segarra, chief marketing officer at The Palm Beaches.
Segarra said he believes the decline in hotel occupancy in April and May will be reversed when the numbers come out for June.
He’s heard that occupancy rates last month were in the mid-60 percent range, which Segarra said would be a notch above last year’s 62.5%. Plus, indications are the Fourth of July holiday was strong and The Palm Beaches is out promoting the county as a drive-to market for the rest of the summer.
The downward trend in gasoline prices is fortuitous as Palm Beach County typically draws visitors from across Florida — Orlando, Miami, Fort Lauderdale, Tampa Bay — plus Georgia and New York this time of year. Segarra also pointed to the “Shop the Palm Beaches” promotional campaign, as well as another venture that will “take four top area chefs” to New York to promote culinary talents to media and clients.
“Constantly, in June, July, August and through September, we have a lot of events to increase the visibility of the destination and make sure that people will visit us,” Segarra said. “It’s an indicator of how we are diversifying all types of tourism services and experiences that we can offer. So that’s good news.”
The bigger question is whether the trend is a harbinger for the rest of 2023. Much of that, STR’s Cronk said, will depend on the U.S. economy beating a two-year bout with inflation, as well as whether a slowdown or recession follows.
For the time being, Ricci said his travel-industry alums say the state’s leaders, within the business and outside of it, should again speak with one voice and one message. Namely, keep coming to Florida.
That’s what helped Florida’s tourism industry recover so fast from the pandemic, he said, led by the governor. “He opened us early, so that’s the reason we had two years of super success,” Ricci said.
Actions that are interpreted as pulling the welcome mat away risk weakening Florida financially.
“The problem is that it’s a business that is the number-one private employer and economic engine of the state,” Ricci said. “And of most of the 67 counties within the state.”
Palm Beach Post reporters Stephany Matat and Alexandra Clough contributed to this story.
Antonio Fins is a politics and business editor at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach him at afins@pbpost.com. Help support our journalism. Subscribe today.
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