Tourism Pick Up Unlikely in 2010

August 23, 2009

Keith Overton couldn’t offer much sunshine as he penned a memo to employees of the TradeWinds Island Resorts last week on the outlook for 2010.

More discounts to help fill 794 rooms in the two properties on St. Pete Beach. Continued declines in business meetings. In short, no quick relief from the recession’s grip despite signs the U.S. economy is perking up.

“Just look at history,” said Overton, the resort’s chief operating officer. “The travel industry is the last to be affected and the last to recover. When we come out of it, travelers are ultra-conservative.”

Florida’s tourism industry has taken a beating as visitors from outside the state dropped 10 percent in the first six months. Floridians picked up some of the slack, though their leisure trips are shorter and they spend less.

Hotels and restaurants also have been stung by a declining meeting business, both in fewer events and smaller attendance. Worries over increased scrutiny of trips to resort destinations has fueled the slump.

“This is the most challenging time I’ve seen in the 14 years I’ve been representing them,” said Carol Dover, CEO of the Florida Restaurant & Lodging Association. Members she visited in a recent statewide trip reported revenues down 20 percent on average from last year.

A slow rebound for tourism will hinder Florida’s economic recovery. More than 900,000 people work in the state’s leisure and hospitality industry, which generates 20 percent of state sales tax revenues.

Economists point out that those numbers include restaurants and bars that rely more on Floridians than visitors. But they don’t discount the tourist industry’s role as a pillar of the economy along with health care, government and retail.

“Its importance is magnified because of what’s happened with (the state’s) population declining and how that feeds into construction and the housing bust,” said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

Businesses and consumers typically hold off on travel spending until well after a recovery is underway, he said. If high unemployment continues into next year, as most economists predict, “both leisure and business travel are going to have a tough going,” Snaith said.

At the Sheraton Sand Key Resort on Clearwater Beach, bookings for future meetings jumped in June, tumbled in July and were flat this month. “Just when you think it gets going, it falls back again,” said general manager Russ Kimball.

One bad omen: planners who typically reserve space six months to a year ahead are booking more business for 2011 than for next year.