SLOW SEASON: Tourists Not Spending

SLOW SEASON: Tourists continue to visit, but they're spending less, retailers say

By ALLISON ROSS
Palm Beach Post

Sunday, March 22, 2009

It's a perfect Saturday afternoon: Chamber of Commerce weather.

On Clematis Street in West Palm Beach, couples with Starbucks frappuccinos in hand peer into the windows of Maine Cottage. Customers sip drinks at Rocco's Tacos.

In CityPlace, women with dark, oversize sunglasses push strollers past storefronts.

It's the same scene every tourist season.

Midway through this season, though, tourists are a little more reluctant to pull out their pocketbooks. There may be crowds, but there are fewer shopping bags. Cash typically spent on attractions, souvenirs, restaurants and gifts is in short supply.

"Are you kidding? There's no tourist season this year," said Renee Davidson, a waitress at Italian restaurant De Napoli on Clematis Street. "Last year it was slower, but this year it's like it's not happening."

Palm Beach County's tourist season, which runs from Thanksgiving to Easter, is a driving force in the area's economy.

Snowbirds from the Northeast and Canada flock to beaches. International travelers come for a taste of the South Florida lifestyle.

Those revenues are generally the nest eggs that businesses use to get them through the leaner summer months.

"The tourist season keeps a lot of little shops and stores and restaurants open," said Enid Atwater, a spokeswoman for the Palm Beach County Convention and Visitors Bureau.

"The county depends on travelers to keep the economic engine going, to keep our economy alive."

But this year, although visitors continue to crowd popular destinations such as CityPlace, the tourist season has been quieter than usual because of worries about the tough economy.

According to figures from Palm Beach International Airport, the number of passengers coming through the airport from November through January fell 10.2 percent, which translates to 187,180 fewer travelers.

In the same period, the number of international travelers fell 40.6 percent from the year before.

'Big challenge ahead'

While the county's hotels are doing better at filling up rooms than the rest of Florida, revenue for the county's so-called bed tax - a tax on short-term lodging - has fallen almost 15 percent since September, forcing Palm Beach County tourism agencies to slash their budgets.

"Things are going significantly slower than usual," said Jorge Pesquera, president and chief executive of the Convention and Visitors Bureau. "We have a big challenge ahead."

In January, the average hotel occupancy rate was 64 percent, down 8.2 percent from January 2008, according to Smith Travel Research Inc.

There might be even fewer travelers if hotels in the area weren't cutting their rates to entice customers. The average daily room rate fell a record 18.1 percent in January to $160.84, according to Smith Travel.

Even upscale hotels aren't immune.

"The whole industry now, it's a day-to-day situation as to how we're doing," said Christine DiRocco, director of public relations for The Ritz-Carlton in Manalapan. "People are a little bit more aware of how and when they spend their money."

DiRocco declined to talk about whether the hotel was cutting room rates to bring customers in, but did say that The Ritz-Carlton was being "competitive in trying to attract New England guests down here. You have to be open and flexible in these times."

Rick Rose, co-owner of Grandview Gardens Bed & Breakfast in West Palm Beach, said his business is down 5 percent to 10 percent.

Both DiRocco and Rose noted that a lot of people are waiting longer to book, in part because they are hoping to take advantage of last-minute offers.

"Most times, that works, because we're very nervous about filling rooms," Rose said.

Fewer gifts, smaller tabs

Even when rooms are filled, tourists are watching their wallets and budgets. As a result, businesses that rely on winter tourism are ringing up smaller sales.

For instance, CityPlace said traffic through its garages was up 12 percent in January and February, but Field of Greens general manager Susan McCann said sales have been weaker than usual.

"Business is definitely slower than normal," McCann said. "We're still seeing tourists - on weekends especially - but fewer tourists are coming in."

According to data from the Tourist Development Council of Palm Beach County, the average daily expenditure per tourist from October to December fell about 12 percent from the same period in 2007.

With the exception of entertainment, spending fell across the board. For instance, average tourists spent $27 a day in the fourth quarter of 2007 on gifts and shopping; for that period in 2008, they spent $22 on presents for themselves and the family back home.

A $60 tab for food and drinks in 2007 averaged $50 a day from October through December last year.

Atlantic Avenue in Delray Beach remains crowded, but Marjorie Ferrer, executive director of the Delray Beach Downtown Development Authority, said some of the stores on Atlantic Avenue are cutting their part-time workforce.

Ferrer said the authority is brainstorming ideas to lure visitors and is even talking about offering leniency for people who are a little late getting back to their cars when their parking meters expire.