MARCH 17, 2009
Austerity Tide Hits Florida Beaches
Tourism Industry Suffers as Businesses Cancel or Scale Back Events in the Sunshine State
By ALEX ROTH
WSJ
AMELIA ISLAND, Fla. -- Luxury resorts are accustomed to unusual requests. But Amelia Island Plantation was surprised to get this one from a corporate event planner worried about a function appearing too extravagant: could the resort drop the word "island" from its address? Another potential client said it wouldn't consider any hotel with the words "spa" or "resort" in its title. A construction trade association canceled its 400-person annual convention at the resort scheduled for June, citing similar worries.
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For tourism officials in Florida, the drop-off at Amelia Island Plantation is an ominous sign that the tourism industry, the state's lifeblood, is in for a brutal year. Executives at the resort say they have lost about $750,000 in revenue since January, as businesses and trade groups shun the negative publicity associated with anything even remotely resembling a boondoggle. In the final quarter of 2008, the number of out-of-state visitors to Florida dropped 13.6% from a year earlier, the largest quarterly decline since the quarter following the Sept. 11, 2001, terrorist attacks. Many tourism officials expect a double-digit-percentage drop in visitors in 2009, at a time when the state is reeling from other economic woes, including being among the hardest hit areas of the real-estate meltdown.
In Orlando, tourist hot-spots such as Walt Disney World are offering a variety of cost-saving promotions to boost flagging attendance. In Fort Lauderdale, owners of beachside rental properties that used to sell out months in advance still have vacancies as the spring-break season approaches. A drop in tourist-related revenue hits especially hard in a state that has no personal-income tax and relies on tourism for a significant portion of its sales-tax revenue. In 2008, 82.5 million people visited Florida, according to state officials. Of the state's 18.8 million residents, nearly one million work in jobs linked to tourism.
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On Amelia Island, 30 miles northeast of Jacksonville, the impact of the tourism decline is particularly acute. Roughly 36% of the county's sales-tax revenue is generated by tourism. More than half a million people annually visit the island, with its 13-mile coastline and historic downtown district. Nature lovers come to the island to witness loggerhead turtles nesting in the sand and whales swimming just off the coastline. The island's two premier resorts -- Amelia Island Plantation and a Ritz-Carlton -- have lost a combined $6.2 million of convention and retreat business since the fall, according to Gil Langley, president of the Amelia Island Convention & Visitors Bureau.
Last month, BB&T Corp., a bank based in Winston Salem, N.C., that has received $3.1 billion in bailout money, canceled a March retreat at the Ritz for its top sales people. BB&T spokeswoman A.C. McGraw called the cancellation "a prudent business decision." Amelia Island Plantation is an expansive resort with four golf courses, more than 20 tennis courts, a spa and condos that fetch up to $800 a night. Among the groups who recently canceled events there are a California food distributor, a Georgia construction trade association and an Ohio hardware manufacturer, according to the resort.
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Printed in The Wall Street Journal, page A3