Southwest Florida could net a healthy number of visitors this winter, but the local competition for their business is fierce.
People who manage hotels and condos are starting to realize that visitors have many, many options.
After three years of raising rates, they are now focused on making sure guests return.
David Teitelbaum, president of a small condo-hotel resort on Anna Maria Island, said that’s what drove him to make a rare move: He lowered winter season rates.
“If we didn’t have such a high repeat and referral business, we’d be sticking the rate as high as we could,” Teitelbaum said. “We want them to have a good Tortuga experience,” he said, referring to the 55-unit hotel in Bradenton Beach.
The vacationer’s first choice — where to stay — kicks off a whole series of spending decisions. Will they stay inland and drive to the beach? Where will they eat on the way?
Managers see patterns that emerged last year continuing.
First, a glut of condos is drawing bargain hunters to the mainland. Second, small hotels are seeing less advance booking.
Teitelbaum’s rate cut is an extreme example, but accommodation managers are paying attention to their prices. That is not surprising, given the statewide outlook for tourism.
Barry Pitegoff, vice president of research at Visit Florida, told tourism professionals gathered in St. Petersburg last fall that visitor numbers could level off in 2007.
He cited increasing room rates and a concentration of growth among affluent travelers. While big spenders are nice, there are only so many.
“Competition has gotten fierce right now for sun destinations in general,” said Gary Ettinger, vice president of the eastern region for ResortQuest, based in Nashville, Tenn.
ResortQuest manages about 2,000 condos and houses from Manatee County to Naples.
Like most managers, Ettinger was optimistic about the season. But ResortQuest worked hard for the growth.
Ettinger hired a revenue manager to do a comprehensive rate review. ResortQuest raised rates by as much as 5 percent in Sarasota and Longboat Key. In other spots, ResortQuest “right-priced” rates while eliminating discounts.
Ettinger acknowledged that management companies are facing a lot of competition from by-owner vacation rentals, but he said they can’t afford to chase bargain hunters.
Condos, which hold the bulk of beds in the area, are plentiful. Some condo managers are responding by holding rates in check, despite the wishes of their owners.
“When you’re talking about rates, you’re talking about a different market,” said Gloria Stephens, rental manager for Midnight Cove on Siesta Key. “You’re talking about how do you get visitors in.”
After surveying competitors on the key, Midnight Cove went with a 2.5 percent increase for this season.
“My gut tells me not to raise rates for ‘08 either,” said Walt Hammerling, who manages several hundred units on Siesta Key.
Hammerling said he knows that new condos on the mainland are skimming off the island business.
“They don’t mind just periodically driving to the beach,” Hammerling said of the bargain-hunters.
Nancy Speek, co-owner of Home and Condo Rentals in Venice said she has so many more condos under her management that she added two agents.
Still, units available for a short period, less than three months, are going quickly. “And we’re doing a good booking for ‘08 already,” she said.
Visitors are snapping up expensive digs as well. Michele Knuese, president of Florida Vacation Connection on Longboat Key, said she expects a 10 percent increase in occupancy over last year.
“We have some very high-end properties we have no trouble renting,” she said.
High-end means $10,000 to $25,000 a month.
Another high-end locale, Boca Grande, is doing well, said John Brandenberger, general manager of Parsley-Baldwin Realty. “Even the ones that didn’t rent last year are rented this year for the same time period,” he said.
Hotels, which are not as plentiful as condos, have reaped the benefits of strong visitation and a shift toward shorter stays. The average daily room rate in the Sarasota-Bradenton area reached $142.66 last March, according to Smith Travel Research.
Two big corporate players, the Ritz-Carlton and Hyatt Sarasota, say rates rose again this year, but even they were sensitive to the competitive climate.
The Hyatt, which is undergoing a $7 million renovation, acknowledged a soft spot among visitors within driving distance and increased its AAA discount from 10 percent to 15 percent, General Manager Mohammad Gharavi said.
Ritz-Carlton General Manager Jim McManemon said he didn’t raise rates across the board. A guest arriving on a Sunday might find a package deal cheaper than last year. Those who want to be here for Easter week will definitely pay more.
Meanwhile, some mom-and-pops say they are uncertain about the season because they don’t see as much advance booking as they used to.
“I still have Easter week open, which is just crazy,” said Prudie Varro, who manages Sunsets on the Key, a small hotel owned by her son and daughter-in-law.
Paige Hartmann, owner of Siesta Key Suites, said the last-minute business has gone from about 25 percent to 50 percent in winter.
She would like to keep a one-week minimum during the season, but she said, “If it’s not filling in the way it should, I will definitely go down to a three-night minimum.”
One seasonal business riding high as ever: RV parks.
Fancy RVs are selling, but the number of places to park is shrinking.
In 2006, KOA sold its park in the Florida Keys at Mile Marker 70, noted Mike Levine, who manages six Encore-branded parks from Port Charlotte to Palmetto.
When Encore raised rates, which included a 10 percent hike at Royal Coachman in Nokomis, the RVers kept their reservations, Levine said.
“Over all my properties, we’re running ahead of forecast.”
By KATHLEEN MCLAUGHLIN
Very interesting post, Kathleen and, that’s some fierce competition going on, good thing I am not in the hotel/restaurant industry. I would imagine that the real estate competition out there is just as fierce, perhaps I can be of assistance.
My name is Scott, I work for Wallhogs and we recently began making Wallhogs for some realtors to use for their advertising and marketing. Is this something that would work in your industry? You’ve got my email, let me know if this is something that you’d be interested in hearing more about. I can show you some examples and explain anything that needs explaining.
Thanks for your time, I look forward to hearing back from you soon,
Scott at Wallhogs
BIG scott
May 3rd, 2007