Saturday, November 17, 2018
Business

Tourism continues to thrive in Tampa Bay despite Zika and Brexit, but is it recession-proof?

When gas prices go up and wages go down, one of the first things consumers slash from their budgets is a vacation.

But with thousands of new hotel rooms coming online and existing room rates continuing to climb, local tourism boosters in Tampa Bay don't see any signs of an economic recession in sight.

Pinellas and Hillsborough counties have reported record-shattering bed tax collections for years since the Great Recession and rates are only just starting to reach the peak pre-recession levels seen in 2006 and 2007. Both counties have regularly outpaced the state in tourism growth. And with more than 2,000 new hotel rooms set to open in the next few years, tourism officials don't see a slowdown in their forecast any time soon, even with some hiccups like Zika and Brexit along the way.

"You can only push for so long before there's a settling period," said David Downing, executive director of Visit St. Pete-Clearwater, Pinellas County's tourism agency. "We definitely have our eyes on it, but we're only seeing growth. There are new hotels being built and a strong demand for more high-end product."

There is a shift, however, in how Tampa Bay and its beaches are recording growth in tourism. As the economy began to recover around 2010, hotels in the Tampa Bay area started to see an uptick in the return of travelers. Now that travelers come to Tampa Bay in droves, developers are building new hotels again. Those new hotels are driving up room rate prices across the region, which is creating more economic impact, said Patrick Harrison, vice president of marketing and communications with Visit Tampa Bay, Hillsborough County's tourism arm.

"The major growth isn't occupancy anymore, it's revenue," Harrison said. "I think for a long time Tampa Bay was a lesser known destination behind Miami or Orlando. As that changes, we have to very careful that we don't get carried away and out-price ourselves."

Hotels along Pinellas County beaches are seeing the same trend.

"We're seeing a growing yield like never before," Downing said. "That means we can have a greater impact with fewer visitors. Setting goals by number of visitors alone provides no end game. We'd rather have tourists that can spend more than being so overrun with visitors who don't."

Neither county seemed concerned about the Zika virus or how Brexit could potentially impact visitation in the future. The Florida tourism industry still managed to break records this year even as its biggest international market, Canada, struggled with its own economic stability.

"Before Zika there was SARS. There will always be something," said Daniel Lesser, CEO and president of LW Hospitality Advisors in New York City. "In the short term, it's probably not great for the hotel industry in Florida."

He too, didn't see any immediate headwinds on the horizon for the tourism industry.

"If we're not already at a peak, we're approaching one," Lesser said about the economy and the hotel industry in particular. "But hotels are different in that they are market specific. I'd say the peak is behind us in Manhattan, but not there yet in San Francisco."

Hotels seem to be safer investments than other forms of commercial real estate, he added. The Westin Harbour Island hotel in Tampa sold days ago to a Chicago private investment firm that plans to renovate it. The InterContinental Tampa hotel sold this month and will be rebranded as the Paramount. The Hilton in downtown Tampa sold for $101 million in July. The largest hotel transaction in Tampa Bay history was the $199 million sale of the Marriott Waterside Resort & Marina just two years ago to Strategic Property Partners, a joint venture between Tampa Bay Lightning owner Jeff Vinik and Cascade Investment LLC. SPP plans to renovate the property and build a new hotel nearby in downtown Tampa.

Beach communities across Pinellas County have proposed hotel projects under way. Ocean Properties became the largest hotel operator in the region after it opened the upscale Opal Sands Resort on Clearwater Beach and the Treasure Island Beach Resort earlier this year.

"In the long term, the U.S. is the safest place on earth where people still want to come visit and invest," Lesser said. "There will be another recession eventually and the question will be when and how deep."

Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.

Comments
Man killed in shooting at Cedar Hollow Apartments on Friday

Man killed in shooting at Cedar Hollow Apartments on Friday

A man was killed at the Cedar Hollow Apartments in Pinellas Park late Friday.
Updated: 2 hours ago
Police seek information in deadly home invasion

Police seek information in deadly home invasion

The Tampa Police Department is asking for the public's help with information relating to a home invasion turned deadly.
Updated: 6 hours ago
Off-duty Palm Harbor firefighter arrested for DUI

Off-duty Palm Harbor firefighter arrested for DUI

An off-duty Palm Harbor firefighter was arrested for a DUI Saturday night.
Updated: 6 hours ago
So why isn't Blake Casper resting on his laurels and eating Egg McMuffins every morning at one of his 64 McDonalds?

So why isn't Blake Casper resting on his laurels and eating Egg McMuffins every morning at one of his 64 McDonalds?

He is. But he says he has other restaurants to create
Updated: 9 hours ago
Plant City man killed in overnight crash

Plant City man killed in overnight crash

A Plant City man was killed in a crash Saturday night in Brandon in what is suspected to be a drunk driving accident.
Updated: 11 hours ago
Florida's Brightline rail service partners with Sir Richard Branson's Virgin Group, will become Virgin Trains USA

Florida's Brightline rail service partners with Sir Richard Branson's Virgin Group, will become Virgin Trains USA

Brightline, the South Florida train and development company that wants to expand to Tampa, will change its name to Virgin Trains USA after partnering with Sir Richard Branson's Virgin Group.
Published: 11/16/18
Free turkey with flu shot? The best Thanksgiving meal deals: Publix, Walmart, Winn-Dixie and Target

Free turkey with flu shot? The best Thanksgiving meal deals: Publix, Walmart, Winn-Dixie and Target

Every major grocer has some sort of turkey deal this weekend or in the days leading up to Thanksgiving. So, let's break down where you can find the cheapest bird for your friends and family.
Published: 11/16/18
Florida jobless rate drops to 3.4 percent, adds 17,800 jobs

Florida jobless rate drops to 3.4 percent, adds 17,800 jobs

Unemployment continues to fall across the state and the Tampa Bay region holds its own.
Published: 11/16/18
Green Bench Brewing's expansion 'an investment' into St. Petersburg

Green Bench Brewing's expansion 'an investment' into St. Petersburg

Set to open early next year, Green Bench Brewing walks us through the new space and ambitious new projects.
Published: 11/16/18
Longtime Florida Steel CEO Edward Flom of Tampa dies at 88

Longtime Florida Steel CEO Edward Flom of Tampa dies at 88

Under Edward Flom, Florida Steel's 2,300 employees produced reinforcing steel — often just called rebar — for projects from the Sunshine Skyway Bridge to Tropicana Field, plus countless homes.
Published: 11/16/18