The Almighty Tourist

 

The Economy of TourismBig Profits and Perception Problems are All Part
of Promoting Paradise

The Emerald Coast tourism industry has long proven to be a survivor, despite hurricanes, beach erosion, drowning and shark attacks – and the negative international publicity that ensues following such attacks. This economic cornerstone surges ahead, bringing more than 7 million visitors – and their wallets – to Okaloosa and Walton counties each year and directly providing more than 45,000 jobs for residents.

The pristine beaches and waters, bountiful fishing, shopping, coastal dining and recreational opportunities thrive in a unique symbiosis that has lured visitors and sportsmen for generations.

This unique “economic ecosystem” must resist the predations of storms, erosions, competing markets, threats to fishing stocks and similar disasters in order to survive. Moreover, it must protect and preserve its image as a vacation destination.

Bed-tax collection data from the University of West Florida’s Haas Center for Business Research and Economic Development is a standard rule of measure of the health and resiliency of this industry sector. This targeted tax collection, drawn from lodging dollars, is assessed at 4 percent for Okaloosa and Walton counties and is used to support tourism initiatives.

“Proceeds from overnight visitor dollars are used to protect and maintain the beaches and market the destination throughout the country,” said Kriss Titus, executive director for the Beaches of South Walton Tourist Development Council. “We collect 4 cents of bed tax for every dollar of lodging revenue on short-term room nights sold.”

Combined, the two counties levied more than $17 million in collections from $425 million of lodging revenue in 2006. The Haas Center data further suggest that even during periods of unusual storm activity, the tourism dollars readily recover.

Since tourism activity and the tourism profile vary throughout the year, comparing monthly data on a year-over-year basis sheds light on how the area rebounds.

During the three-month period encompassing Hurricanes Dennis, Katrina and Rita in the summer of 2005, total, inflation-adjusted revenues, as reflected in the Haas Center’s bed-tax data, declined by 17 percent from the same period in 2004. However, in the same August-through-September period in 2006, collections were up more than 22 percent over 2005.

Beaches and Water: Pulling in Tourists
Among the myriad amenities that appeal to tourists, the economic engine is driven by a key element: the beaches. Without them, the area would not have as many tourists, and coastal land and properties would be just expensive seawalls.

“Without a doubt, the core driver of our economy is the beaches,” said Shane Moody, chief executive officer of the Destin Area Chamber of Commerce. “That’s why people come to Destin and South Walton. People love the water – they always have. But while the beaches are the draw, the Destin Harbor makes us unique. There are very few resort areas you can visit and have a working harbor like we have here. And as redevelopment occurs on the harbor, it will become an even larger attraction – not just for our visitors and tourists, but for residents as well.”

Dawn Moliterno, chief executive officer of the Walton Chamber of Commerce, agrees.

“The white sandy beaches are our core driver, and when you add in the emerald water, how much better can it get?” she asked.

Jim Breitenfeld, executive director of the Destin Harbor Association, a business association dedicated to revitalizing the harbor, also agrees that the beaches are important but also includes the harbor as something that distinguishes the area from the competition.

“The beaches are clearly the core driver of our tourism economy,” Breitenfeld said, “but we will suffer if all we have is the beaches. Everyone for a hundred miles to our east and west has beaches. This is why we are working so hard to see responsible and exciting development come to the Destin Harbor District. It will be a new destination with many new alternatives for tourists.”

Ted Corcoran, chief executive officer of the Fort Walton Beach Chamber of Commerce, adds that beaches are only the beginning of the attraction and that other amenities eventually appeal to visitors.

“Once here, they experience the shopping and restaurants,” Corcoran said. “Sometimes when they return they don’t even go to the beaches anymore. Thus explains why Thanksgiving week and Christmas shopping season have become busier.”

Threats to Tourism – Real or Imagined?
Threats to our beaches and harbor clearly need to be addressed proactively. However, some threats may exist only in tourists’ perceptions. Specifically, adverse publicity or misinformation can do great harm in the increasingly competitive arena of tourism marketing. Such negative publicity is further exacerbated when it gets into the national spotlight, with coverage so wide that marketing dollars simply can’t stand up to it.

Moody notes that the perception stemming from hurricanes persists long after the area has recovered.

“The past two years, the tourist-driven economy has been down due to the bad publicity we received because of Ivan and Dennis,” Moody said. “In fact, we still get calls in our office with questions about ‘recovery.’ The ironic part of that is we were up and running shortly after both storms. It’s very difficult to overcome live media coverage from your beaches during those types of storms.”

Moliterno, who also is a member of Walton County’s Beach Education and Safety Committee, agrees with the notion of visitor perception.

“When a hurricane happens anywhere in the Gulf Coast, the perception is that we are wiped out or not recovered,” she said. “The Beaches of South Walton Tourist Development Council does an excellent job in getting the word out that we are open for business and our pristine beaches look better than ever.”

However, a very real threat, according to Moody, is the issue of restoring local beaches.

“This is important, not just to have the beaches for people to visit, but for the protection of the upland structures,” Moody said. “We have to move forward with beach restoration, and we must find a way to fund it.”

Turn Off the Weather Channel and Come on Down
With 32 years of economic development experience – 17 of those spent on the Emerald Coast – Breitenfeld understands the importance of tourism to this area. He said that in the increasingly competitive market for tourist dollars, a proactive approach is essential.

“I think the biggest threats to tourism in Destin are perception and competition,” Breitenfeld said. “The perception issue is one we share with the entire Gulf Coast, and it stems from our recent hurricane history. The near-hysteria the Weather Channel generates when a tropical storm with 35 mph winds makes landfall 300 miles from us causes many folks to change vacation and travel plans. We, as a community, need to find a way to more aggressively combat this with the facts. The competition issue simply means we need to keep reinventing ourselves while holding on to our core fishing heritage and maintain our harbor and beaches at their highest level.”

Corcoran, who also serves as a Destin city councilman in addition to his chamber position, sees hurricanes as the biggest threat – but also places a lot of blame on the media.

“The Weather Channel is one of the worst things that could have happened to our tourist business,” he said. “With over 90 percent of our visitors driving here, we have never seen a downturn since 1990 (when the Tourist Development council started tracking occupancies), except for after hurricanes. Hurricanes scare people away, and deservedly so – they are very scary.

“Before the Weather Channel, folks in our major feeder markets wouldn’t think twice about deciding to come down here on a Thursday afternoon or Friday morning and simply drive to the beach for the weekend,” Corcoran said. “If it rained – once they were here and had paid their lodging facility – they had to find alternative fun besides the beach. Now, the Weather Channel is the first place they look before deciding to consider going to the beach. If they see even a potential for bad weather, the trip is canceled.”

National Spotlight: It All depends
National coverage can create distorted or negative publicity. But how bad does it affect tourism?

“I don’t think it affects us appreciably at all,” Moody said. “Are there effects? Absolutely, but we keep moving forward. The key to (managing a) negative image is to be prepared to handle it, and I think the community does a great job at ‘keeping the faith.’”

Moliterno believes the Emerald Coast needs to be proactive.

“In today’s society, the news spotlight is fickle and changes in a heartbeat,” she said. “Today’s headline is yesterday’s news. It is important for us to continue to tell the story about all the good events, beach restoration and great recreational opportunities we have to offer in this region, while educating the public on safety to avoid some of these tragedies.”

Perceptions indeed reshape tourists’ mindset – and probably no event in our nation’s history did more to rattle the traveling public’s mind than the terrorist attacks of Sept. 11, 2001. In September 2001, bed-tax collections for Okaloosa and Walton counties dropped by 4.6 percent as compared to the same month the previous year. Collections rebounded for September 2002 by 17.9 percent, attesting to the area’s resiliency as a vacation destination.

Economic Diversity Ensures Survival
Since threats, real or perceived, can be expected to continue pressuring the Emerald Coast’s tourism business, economic diversity mitigates a dependency on it.

“The whole purpose of economic development is to diversify the economy from the onset,” said Larry Sassano, executive director of the Okaloosa County Economic Development Council.

While the economic activity generated by tourism in Okaloosa alone approaches the gross national product of Nicaragua at $1.5 billion a year, the impact generated by the military and defense contractors anchor the county’s economic base with $4 billion per year, according to figures provided by the Okaloosa County Economic Development Council.

Consequently, the economic development councils of both Okaloosa and Walton counties pursue economic diversity objectives. Okaloosa County currently is focusing on the creation of an Emerald Coast Research and Technology Park to bring more research initiatives.

Although always on the lookout for opportunities to diversify the county’s economic base, Walton County Economic Development Council Executive Director Robert Smith acknowledges that the county is leveraging its strengths with tourism.

“Regardless of whether it was planned or came about as a result of demand and opportunity, Walton County followed a basic economic development principle: You identify your natural assets and resources, then add value and market your product,” Smith said.

The Emerald Coast’s beaches, harbor and waters clearly are our most valuable natural assets – so protecting them, as well as the marketing message, is the challenge.

Many thanks to our Emerald Coast Business Journal cover model, Kevin Boyle. Boyle’s comedic talents can be seen in person at The Seaside Repertory Theatre (seasiderep.com), where he serves as development coordinator for the organization and performs with Basic Character Flaws (theflawsimprov.org), a local improvisational troupe.

Okaloosa’s TDC Chief Operating Officer Talks Tourism

Darrel Jones only has to look out of his Okaloosa Island office window a few hundred yards towards the emerald waters and snow-white beaches to get inspiration for his job. His lengthy title – executive director, president and chief executive officer of the Okaloosa County Tourist Development Council/Emerald Coast Convention & Visitor Bureau Inc. – supports his straightforward mission: to ensure that the worldwide tourism market is aware of this wondrous setting, with its rich amenities, and to make sure the Emerald Coast can accommodate them.

In his job, Jones is charged with a cross-section of initiatives to market the area as a vacation destination, as well as to help ensure that it retains its natural beauty and appeal.

Jones has 37 years in the tourism business – 20 years in senior management with the American Automobile Association and 17 years in his present position. He was appointed by former Florida Gov. Jeb Bush to the Florida Commission on Tourism/Visit Florida Corporation Board of Directors and recently was elected as the board secretary.

Jones recently took some time out of his busy schedule to share his thoughts about tourism in the area with Emerald Coast Magazine writer Scott Jackson.

How does the bed tax work?
The Okaloosa County TDC is funded by the tourist development impact fee of 4 percent placed on short-term lodging facilities only in the southern portion of the county. The funds are paid by visitors to the Destin, Fort Walton Beach, Okaloosa Island, Mary Esther and Cinco Bayou areas only. Self-administration of the tourist development tax by Okaloosa County began in July 1992. Revenue collected from the impact fee is allocated to tourism marketing, advertising and promotion, beach maintenance and restoration improvements, public-beach access-way parks, Americans With Disabilities Act dune walkovers, beach cleaning and trash removal, a certified turtle watch program, water testing throughout Choctawhatchee Bay and the Gulf by Environmental Council volunteers, tourism administration, promotion and operation of the Emerald Coast Conference Center, and reserve contingencies for local emergency funding.

How has the increase in foreign workers affected tourism?
The foreign workers have taken a major foothold in the construction of new condominiums and hotels. Many construction companies hire foreign workers to do the destruction and new construction at these work sites. This trend became more noticeable after Hurricanes Dennis and Ivan, when housing needs for these foreign workers made a significant impact on the local housing market.

Have any new factors caused a change in the tourist profile?
The use of the Internet has changed the way people get their information. Ten years ago, it was through magazines, television and movies. Now, the Internet is available 24 hours a day, seven days a week. Our Web site traffic has increased 74 percent in the last six years.

Are there any matters at the state level that will affect our tourism industry locally?
Yes. With the decrease in ad valorem taxes to the counties, funding may be looked at from the Tourist Development Tax Trust Funds to help supplement county budgets. This will surely cut into marketing dollars to continue the state and local tourist development councils’ efforts to continue to promote tourism to Florida.

 

Business Survivor: Gulfarium
Entertaining and Educating Emerald Coast Visitors Since 1955

By Scott Jackson

For more than half a century, Florida’s Gulfarium in Fort Walton Beach has entertained and educated countless visitors while serving as an anchor of the area’s evolving tourist industry.

A tried-and-true tourist destination, the Gulfarium was born of one man’s passion for Emerald Coast marine life, as well as a dream to share his knowledge with others visiting this area from around the world.

In 1952, John “Brandy” Siebenaler, armed with a degree in aquatic and marine biology from the University of North Carolina and several research projects under his belt, was diligently conducting studies near the Okaloosa Island pier for the University of Miami. On one sunlit day at the pier, he developed the concept for his dream project – Florida’s Gulfarium.

“He saw the most beautiful site he had ever seen,” said Don Abrams, general manager of the Gulfarium.

Two years later, in 1954, Siebenaler’s vision became reality with the construction of the Gulfarium’s first 600,000-gallon marine tank. The original staff consisted of only three people, including him. Siebenaler’s efforts bore fruit: On Aug. 15, 1955, the Gulfarium officially opened. In operation for more than 50 years now, it is the oldest continuously operated marine show in the world.

Siebenaler and his marine-scientist colleagues developed technology that pumps water from the Gulf of Mexico through specially designed filtration systems to support the nearly 1 million gallons of seawater required for the various tanks and animal exhibits.

Early design issues created some close calls, Abrams said.

“We had a dolphin demonstration on the top of the water of the main tank, as well as a shark-feeding demonstration underneath. That formula didn’t work,” Abrams chuckled.

This lesson learned led to the creation of the 50,000-gallon shark exhibit in 1956.

In the early ’90s, renovations began at the marine life facility and drew upon the tight collaboration and technical knowledge of Siebenaler’s colleagues. The Gulfarium continues to draw upon this early teamwork to research and develop ways to improve water quality and the health of the marine inhabitants. Since 1996, the Gulfarium’s staff continually has tapped into this collaboration and made improvements to modernize existing exhibits and create new attractions.

The Gulfarium perches right on the coastline, and because of its location the facility saw its two biggest challenges – one named Opal and the other Ivan.

Hurricane Opal in 1995 caused $2.2 million in damage and shut down the Gulfarium for more than a year. Although the damage to the property was extensive, the animal inhabitants fared well, according to Abrams.

In 2004, Hurricane Ivan shut the operation down for eight months and required a $1.5-million reconstruction effort.

Through these weather-related challenges, as well as the slow but constant evolution of the Emerald Coast from a sleepy fishing village to a high-profile tourist mecca, Florida’s Gulfarium has flourished. Each year, an estimated 150,000 people tour the marine park.

Siebenaler died in 2000, but his legacy is carried on with the involvement of his son Greg, who focuses on his father’s vision to “educate, inform and inspire” through one of the Emerald Coast’s most unique and viable tourist destinations.

 

 

 

Gauging Changes in the Emerald Coast Business Climate

By Lori Hutzler Eckert

Destin-based Sterling Companies announced that its One Water Place condominium project, located on 14 acres in Kelly Plantation, is expected to open in early October. The $100 million-plus project, which broke ground more than two and a half years ago, features three 16-story buildings equipped with high-quality interiors, finishes and amenities, as well as $6 million in lavish landscaping.

Monarch Events recently opened for business in Destin. Co-founded by Hillary Fosdyck and Briane Workman, the firm will offer special event planning and coordinating services for public and private functions on the Emerald Coast.

Sacred Heart Hospital on the Emerald Coast opened its Family Birth Place in early September. The new addition to the 4-year-old hospital will offer personalized maternity care with private suites, as well as pregnancy and parent education classes.

A groundbreaking ceremony was held in August for the OWC South Walton Center. The center, Okaloosa-Walton College’s seventh instructional site, will be located near the intersection of U.S. Highways 331 and 98.

Marking its 15th anniversary, O’Connor Ricks Associates announced that the local communications and design firm has changed its name to Fresh Creative. The company, located in Fort Walton Beach, specializes real estate and development and hospitality property marketing.

Local design firm, pv+r llc has been awarded the contract to design the Biophila Center at Nokuse Plantation, a 53,000-acre private conservation initiative in Northwest Florida. The new center will serve as a facility for continued environmental education and wildlife rehabilitation.

Destin developer Legendary Inc. and Yacht Clubs of the Americas recently announced a joint venture to develop Legendary Yacht Clubs throughout the northern Gulf Coast region from Louisiana to Florida. The partnership between Steeven Knight, chief executive officer of Yacht Clubs of the Americas, and Peter Bos, CEO of Legendary Inc., will provide permanent and affordable water access for boaters to the Gulf Coast waterways, as well as luxurious amenities and concierge service. Legendary Marina, located in Destin on Choctawhatchee Bay, will be the first project in the joint venture. The marina will be renamed Legendary Yacht Club of Destin and will be modeled after current Yacht Clubs of the Americas facilities.

Silver Sands Factory Stores, owned and operated by Howard Group, opened Carrabba’s Italian Grill on Aug. 13 and Cheeseburger in Paradise on Sept. 10.

Sandestin Golf and Beach Resort’s marketing and public relations team recently was honored with six public relations awards, including a Grand Golden Image Award for Sandestin magazine, by the Florida Public Relations Association.

Officials with the nonprofit Bridgeway Center Inc. in Fort Walton Beach announced that the addictions and substance abuse program was successfully reviewed by the Florida Department of Children and Families’ Office of Substance Abuse and received high marks for the organization’s treatment efforts and innovations.

The Red Lotus Center for Massage announced its opening over the summer in Destin’s Harbor Square business complex. The center will specialize in Swedish, deep tissue, medical and sports massages.

DAG Architects Inc. in Destin recently was honored with the AIA Florida Firm of the Year for the state of Florida in recognition of outstanding achievement in design, community service, education and service to the profession.

To submit company news to Emerald Coast Business Journal, please e-mail news releases to lori@eckert.com.