In what was supposed to be the best July we’ve ever experienced in Panama City Beach, threat of oil-covered sand and fear of ruined vacations kept visitor’s away. This summer was supposed to be the beginning of a new era in Panama City Beach tourism growth with high expectations from the performance of the new airport and the millions of dollars of extra marketing money that was being pumped into the awareness of our area. Local officials, organizations and industry leaders had literally been working up to this summer for years in anticipation of record breaking numbers; and it was all crushed by what some would call a series of blatant mistakes that could have easily been avoided.
June was bad, but could have been worse.
So, let’s dive right in. The first three cents of the June bed tax numbers seemed at the surface to be barely off from last year. There was a decline of 3.35%. I say barely with caution, knowing and understanding that any decline is considered catastrophic, and a decline of 3.35% actually equates to more than $1.3 million in missed revenue for the area. Tourism officials and industry leaders expected an increase this year over last year as high as 15%. And, taking that into consideration, if we had some crystal ball that could confirm that increase, that would equate to another $7 million for the area. Taking into consideration that as of July this year there were a total of 16,397 total units being reported on, that would be on average another $428 PER UNIT for the month of June that might have been expected had we had no oil threat.
July was catastrophic.
July numbers were released last Friday and as quoted by the News Herald, tourism officials and industry leaders were hit with the news like a sledgehammer hitting a pile of glass. Everyone knew their wallets were hurting, but no one knew just how bad it was across the board. In Panama City Beach, the bed tax dollars that were collected on the first three cents during the month of July in 2009 was $1,386,626.85. The July numbers for 2010 were a staggering 14.78% less, at $1,181,617.71. That 14.78% decline was equal to $205,009.13 in missed bed tax collections on the first three cents and a total of $6.8 million in missed revenue for the entire area. Now, if we were to whip out our crystal ball like we did in the previous paragraph and assume we were to see a 15% increase this July over July 2009, then we actually missed 29.78% in revenue. This near 30% would have equated to $413,000 in increased bed tax revenue and an additional $13 million in revenue this year over what we actually received. This $13 million would have been another $840 per unit in July in Panama City Beach, with an estimated 16,397 units reporting.
Another day, another dollar. . . lost.
At the end of the day, there was truly some missed opportunity this summer that was a direct result of a huge series of mistakes that were made in the Gulf of Mexico. Even though all summer long, our beached remained pristine and remarkable, our waters warm and clean, huge dollars were kept away from our area our of fear and speculation. We, at PCBDaily did what we could do to keep the awareness of what the beach conditions were really like, but it wasn’t enough. Tourists by the thousands, stayed away from here out of fear. This summer was a wash, even with all the immensely great things we had going for us. Next summer, barring any natural (or unnatural) cataclysmic events is now slated to be the best summer we’ve ever had. With this summer behind us, industry leaders are planning for next year and are anxiously awaiting to see numbers like never before.
PCBDaily 
I blame the news media. If this had happened a decade or more ago, it would have been a blip on the screen and peoples lives would not have been impacted as much. Half of the American people can barely find the gulf coast on a map and haphazardly take the media’s word as gospel. PCB’s beaches were barely tarnished, but the reputation of the gulf coast was and this had less to do with the rig owner who caused the problem as much as it does with the sensationalistic media. No parade when the well was capped. In fact it barely made headlines. Clean unaffected beaches don’t make headlines.
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Yes, the tourism industry definitely took a palpable hit and some suffered more than others. As a result, however, there are tons of travel deals on Panama City Beach Hotels that are unlike any rates seen before the BP mess.
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Yes Todd those “tons of travel deals” are part of the problem and most of it comes out the the condo owners pocket. Many owners are hanging on by a thread, it was how low can you go this season. The problem in 2011 is going to be how to get back to some kind of normal rate structure so everyone can survive going forward.
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Great post Gregg. My thoughts exactly. In an effort to get occupany rates higher, all condo owners seem to be racing towards the bottom as far as rates go..and it’s a one way trip to bankruptcy in my opinion.
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Gregg & Terry,
While you comments are valid, you also need to keep in mind that nightly rates should never be the only focus. You need to look at revenues overall and if the management of your unit either as an owner renting or company is focused solely on the rate you will mis a lot of opportunity to make $. Remember its better to rent 30 days at $100 than 15 at $150.
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I disagree Annie, if our condo stays vacant there is no wear and tear. At some point it does not pay to rent your unit as the potencial cost of renting out weighs leaving it open. Not counting any upgrades, maintenance, and replacements that sometimes can be costly, our taxes, insurance, and HOA’s fees are over $10,000 a year. If we do not make it during the Summer, the rest of the year is either a loss or at best a break even.
There is a much better chance (just my opinion of course) that a “Bottom Feeder Renter” will treat a unit as a motel room at best. We have a huge investment in our condo, it is in our best interest to protect our unit. You are correct however that IT IS in the best interest of a management company to put a “head in the bed” because wear and tear and possible damage is not their problem as the responsibilty lies with the owner.
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What really needs to happen is some large company (ie a hedge fund or something along these lines) needs to buy a whole bunch of unit in various condos at wholesale prices (ie hundreds, perhaps thousands) and then start renting them for a higher rental rates. This would both stablize the rental income in the area, reduce supply and gradually create a more balanced market.
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I agree with Greggt. I am a rent by owner and I have a bottom dollar amount I will NOT got below because of the quality of the guests. I rather than empty than renting to guests who will not treat my condo properly. I found out after 6 years of renting that people who pay a fair amount understand that it is someone else property and treat it with respect. My rates are on the high end in the property my condo is and…I was sold out all summer. I NEVER had damages in 6 years (I do screen my guests carefully). On the other hand, a friend of mine who offer VERY low rates attract a different type of guests. EVERY year, he has damages and I am not talking just a broken dishes. Like Greggt stated, people treat his condo more like a cheap motel. What is better?? $500/5nts with damages OR $300/2nts without damages? It is even worst for the owners renting through a rental agency as they have to pay commision. I tried rental agency for only one year after reailzing that they did not care about who they were renting too and for how much as long as they had bodies in there…no thank you! My unit is beautiful and I want it to stay that way. I rather be empty that to give it away to someone who will not appreciat its beauty. As long as people have this mentality about rental rates…we will have some trouble. I am just blessed to have a strong clienetele who appreciat my litle piece of paradise .
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I tracked the spill daily for my rentals at http://www.noaa.gov.
Anyone else could have done so too. They had a nice daily report and forecast.
In actuality, the oil – in the form of a few coin sized tar balls – reached the west end of PCB for just one day. It was clear to me that it was the result of a low pressure area over Louisiana that it did so. Hurricane Bonnie appeared to actually help, not hinder, things here. The national media, however, discussed the oil slick reaching Panama City Beach while showing footage from Louisiana. And then there is the scare from “chemicals” in the water.
What ever happened to reporting the facts?
What in God’s name are we allowing to happen with our media?
I can only see it as modern Bread and Circus and this was our turn
to be thrown to the lions….
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I agree with everyone here, as I blame the media.I live in South Florida, and even within our own state, the news media, made it seem like the entire gulf coast was destroyed and the oil slick/sheen was washing up and making things bad. When I saw the images from Pensacola Beach and Orange Beach in Alabama, I automatically thought the same must be in PC Beach because the white sand and terrain look so similar. It wasn’t until I visited in late July for a family member’s birthday, that I realized PC Beach was indeed clean and more beautiful than ever…sad, again, it was the media, hopefully Obama visiting helped, but it was too late…oh well, there’s always next summer. Let’s just hope there’s no more accidents!
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RE: Renting out condo units
With the recent newspaper article about Waterstone Resorts LLC selling out their condo rental operation in 10 buildings to Sterling Resorts, a Texas firm and Waterstone (run by: O’neal, Edwards, Gilliland) ‘leaving the NW Florida market, things might get better for owners using them to rent out condos.
They sure did a bad job while they were here, so the new Texas rental firm will have to be an improvement on Waterstone. See http://calypsoresorttowers.blogspot.com/
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Texas company acquires 10 beach condos properties
August 08, 2010 03:47:00 PM
CHRIS SEGAL / News Herald Writer
PANAMA CITY BEACH — A rental management company in Texas recently announced the acquisition and transfer of operations of 10 beach condos.
Sterling Resorts acquired the Waterstone Resorts in Panama City Beach, including 10 condominium properties. Sterling Resorts took over the management of Calypso Resort & Towers, Emerald Beach, Emerald Isle, Majestic Beach Towers, Ocean Ritz, Ocean Villas, Sunrise Beach, Tidewater Beach, Tropic Winds and Twin Palms.
“The acquired locations are run very well, they have vibrant operations and it was a strategic move to more location in Northwest Florida,” said Jim Olin, vice president of business development for Sterling Resorts.
Olin would not disclose any of the financial details of the deal but said both sides were happy and it was an equitable deal. He did say the deal was closed in 45 days on July 23.
Waterstone Resorts will focus its attention on properties in Southwest Florida, Olin said.
The properties will operate as usual, according to Olin, and he said there are no plans for layoffs or budget cuts to reduce operating expenses. The plan is to enhance the marketing for the properties, Olin said.
“We continue to look for opportunities to grow,” Sterling Resorts President Tracy Kundey wrote in a news release. “The purchase of these signature properties in Panama City Beach allows our company to fulfill that goal.”
Sterling Resorts is a division of Dallas-based Encore Enterprises, which is a full-service real estate company. Sterling Resort’s has operated for 15 years and owns more than 20 condominium resorts with more than 1,000 rental units spanning from Mississippi to Panama City Beach.
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It sounds to me like a finger of blame is being pointed at vacationers who were afraid to come because of potential oil issues with the beaches. Many people who didn’t come because of fear save for months for their vacations, while some can only afford a vacation once every couple of years. We need to put ourselves in those families places and not view them as manipulated by the media, but as people who weren’t willing to play russian roulette with their family’s hard earned dollars. As for those “bottom feeders” who took advantage of low rates, hopefully they were treated well and will think it worth the money to come back again next year and pay a higher rate. Seriously, have you NEVER taken advantage of a sale or promotional rate? Did you purposefully pay the highest dollar you could for your rental income unit to help out the seller/local tax base? I doubt it.
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It’s not accurate to blame the media. People plan their vacations in advance, not at the last minute. There was a genuine concern by many that if the booked a vacation, then weeks later the beach could be covered in oil just when they have their one chance of a vacation.
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Taking advantage of low rates is not a “bottom feeder” Mary but those that spammed VRBO 20, 50, 100 or more condos without even looking at what each unit offered looking for the absolute lowest rate is what I consider a bottom feeder. Like many others we never respond to those types. I’m sure some desperate owners on the edge took any offer they could get just trying to generate some cash.
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Could I said it better!!!
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As an owner, I agree with those of the opinion about being careful who you rent to. We have also put a lot of money into our unit to keep it upscale. On another, more optimistic note, next March, Southwest begins service out of Newark, NJ. PCB may still not be a non-stop flight from the NYC metro area, but it will certainly continue to raise awareness. Keep your fingers crossed.
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The decline in tourists just goes to prove how quickly potential visitors will adjust their plans and go to another area that has “no issues’ In recent years I have seen the exact same thng happen to Mexico and Aruba. Tourists ‘just want to have fun” and anything that may potentially impact that is good reason to change ones plans and visit another “safer” choice.
As a tourist myself that last place I would look for an objective account as to the local state of affairs is a local website or news organisation promoting tourisim in that area. No way I would think they would give me a honest and complete account as to what is really going on as they have a vested interest I visit their area regardless of the situation.
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@ Greg T and all owners. One thing you all need to keep in mind is that rental companies, the ones that you use for the marketing of your building and resorts have to make money in order to market. If they don’t succeed the marketing wont happen. The tournaments and events don’t get sponsored and then everyone is left empty. While I completely understand your theory of high rent or sit empty, are you as an individual willing to sponsor the Seafood Festival, Ironman or send sales people to Canada to entice Canadians to come to Panama City Beach. Everyone is so quick to say DONT rent below a certain rate, but if the management companies dont generate revenues than the marketing is left up to the CVB and they would not have enough money to market the area effectively and certainly would not put any into marketing your building. Does your HOA have extra money to buy ads in magazines, attend trade shows and effectively market your? I can tell you that between the BIG 4 Management companies in this town there is an additional $4-5 million that is spent to draw visitors for events, winter stays and tournaments and without a cohesive organized effort no on succeeds.
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I guess everyone has a different situation….. My condo had great rentals in June and July…but August was a disaster….June and July income were above 2008 & 2009 (5-10%)…..But August it was only rented for 3 days vs 16 days average for 2008 and 2009… and those days were at a 10% discount….August income was down 80%…so far Sept is tracking to be even for the last 2 years…
I agree that some bottom feeders are just not worth renting to…I made the mistake last year and agreed to a 60 % discount for 3 days to just fill the calendar between bookings….the “guests” ran the a/c at 60 degrees the whole time…. electric bill for those days was more than the rent…I learned a lesson…sometimes it makes more financial sense to let it go vacant…..
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wow.. i live in bid a wee beach right on front beach road and there and continue to be tar balls .. big ones , small ones, and all sizes in between .. the clean up crews are still here and although we didn’t get nearly as bad as others we’re not out of the woods yet.. so stop the denial.. it’s there come see for your self ..
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Annie, a few notes on your comments.
When our management company starts sharing the risk of damage and or excessive wear and tear on our condo, I could give some weight to your thoughts. In addition the biggest problem to the management companies is not drawing tourists but competing with VRBO. They themselves have created the competition by continuly increasing fees and nickel and dime charges. By the way, we use a management company.
2nd, it is not our HOA’s job to promote rentals period!
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First of all I just wanted to say i visited panama city twice this year. The hotel we stay at has web cams and constantly keep guest updated with pictures of the gulf. I feel very fortunate that finacially we were able to go.
But I think a maybe 15 to 20 % of tourism being down is do to the economy being in the dump. Numbers just came out where i live Oh unemployment is 10% and there are 600 thousand people out of jobs in Oh. And how many NFl cities have not sold out their season opener this year. Thats how bad things are.
But lets talk about pcb , People couldnt wait do destroy all the hotels and build condos, Maybe people just dont want to stay in condos. pcb was built on kids from alabama, families comin from a 300 mile radius, etc. they tore down miracle strip , closed almost all go cart tracks, and almost anything else fun and enjoyable. They force that new airport which really sucks I had to walk about a half mile to get my rent a car, I do like pier park but maybe all the shops are a little to pricy . Grouper imp is up to 29 dollars per person at captain andersons, everyhing is so high, has anyone just thought the people just cant afford 3200 a week a del sole andgo out 7 nights for dinner.
I dont think the entire blame can be put on bp and the media. lets put the blame where it should be put, and thats the white house for not creating more jobs.
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Tim, I would say the reason the motels left and the Miracle Strip, Go Cart track, etc closed were for financial reasons, condos were built because people thought they could buy one, hold and flip it for a profit. Certainly none of this was a “great conspiracy” as you suggest.
One more thing, just HOW can the White House create jobs?
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I believe I posted this once before, but it’s complete misconception to think that governments can create jobs (except for the hiring they do).
If they can that certainly makes my economics degree damn near worthless.
The best they can do is foster an environment that makes corporations, particularly small companies want to hire. Unfortunately, if the general consensus is that there isn’t going to be an increase in demand in the near future, there’s no incentitive for companies to hire people. Essentially with the amount of debt American’s have accumulated over the years and are now trying to reduce, the result is that they aren’t spending $$ the way they use to and thus demand for many goods and services are down. Add that to the fact that many have experienced a drop in their wealth due to their homes decreasing and it becomes a circular problem.
No demand results in companies laying off workers who in turn need less, thus reducing demand even further.
But to blame any particular political party for this, is wrong, unless you want to focus on why house prices are dropping, and why consumers are focusing on reducing their debt. Both are related to the asset bubble in real estate, which didn’t occur on this administrations watch.
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Right on target Terry!
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I have to agree that there are too many condos at PCB. I remember as a kid going to Destin and seeing only sand; I LOVED it. Now I won’t even go there and I have family there; they come to see me as it is more enjoyable for all of us.
We have a single family home on the West End and it is so nice, just like when I was a kid. I do see the condos and high rises coming and it makes me sick. I love the peace and hate to think of all those darn condos – especially the half built ones. I wish we could have them all torn down and make some of the space dedicated beach for all. It would be better for the environment and the economy if growth were controlled.
I can’t imagine why anyone wants to stay in a high rise and wait 20 minutes for an elevator when they could stay in a place steps from the beach – even if they have the less expensive rentals and stay a couple of blocks from the beach it has to be better than standing around waiting for an elevator and hearing all the noise from dozens of families.
Just a thought…
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Perhaps, but we never have to worry about anyone trashing our condo. PC draws the rif-raf much more so than Destin. You cater to the spring breaker and then complain when they break a plate. You cannot have it both ways.
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Gregt , you are right about there are a lot of greedy people that did try to get in on the whole condo flipping thing, but after making about 200 thousand on their first flip they got greedy and lost their ass on the second or third , that is why there are so many condos sitting there with no one renting them, except the people renting to locals so they dont loose their condos to the bank.
Please dont insinuate that I am a tea partier. My first job that i was there for 16 years was a union shop and I did very well, so that should tell you what party i belong to.
My point is that maybe all this BIG IS BETTER is really not the best for pcb.
I love it like it was my second home, Ive been coming down since 1983 paid 24
dollars a night at palmento, west end of beach. When we were there in end of may , it was 7.30 at night we left pinaple willies and that very large condo next door about a 1000 units, there were 7 lights on in the entire building, this was 3 days before the labor day week end. I really believe if pier 99 was still there they would have been totaly booked. Let me try this again .Yes if i turned on the news and heard there was oil in the gulf of mexico I would think there was oil in pcb. But with all the internet pcdaily and all the web sites people should know there was no oil. But now lets get to the real reason numbers are down and its not oil.
1.economy sucks and there are a lot of people the cant afford vacations
2.They tore down all the mom and pop hotels that the people loved to put up condos.
3. They tore down all the fun things to do. I f you were 14 years old, after about 2 days at the pool and ocean , what is there to do? nothing pcb is not really kid friendly.
But for me it still has almost everything I love. I love the all inclusive hotel/resort we stay at. I love going to the salt water grill and captain anderson for dinner and the ocasional run to shuckem for so oysters hit the coyoty ugly for a little entertainment and take a harley to destin and back.
All Im trying to say is maybe a lot of families fell out of love with pcb becasue of all the changes.
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Ginger you get it . I was writting my last comment so I did not see your post.
But like you said and i trying to say the condos have killed what we fell in love with. And no one gets it, They want to blame it on the media and Bp.
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My husband and I will be in PCB Jan., Feb., March, 2011. We rent, making our reservations every year in advance…this will be our ninth year. It never entered our minds “not” to return because of the oil. We return every year because the friends we have made (from the US and Canada), are like extended family. We are out of the cold, snow, and ice!!!! We have an exceptional management, very personable and accommodating. All units are not created equal…some are nice, and disappointingly some are not…even though the price is the same. I’ve had both, but still create a “home” away from home! We will be returning along with four other couples for sure…that’s five condos. There will be more. See you soon, PCB!!!!
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Well Tim I can give a history lesson too. My wife and I spent our honeymoon at the Driftwood in 1980, I believe the rate was $58.00 a night, we stayed there most years before settling on another locally owned complex. By 1991 the rate had crept up to $101.00 a night. Most every year we stayed there until we started condo shopping in 2007, the rate climbed to $147.00 a night. In 2008 we bought our condo at Seychelles. You can stay at a lot of condos peak Summer for that same mom and pop $147.00.
Now as far as that condo complex you were speaking of, it was Lake Town Warf, one part of that complex is shut down due to the over supply currently in PCB, probably you were looking at that section plus LTW is across the street from the beach, not on it. Actually we stayed booked every W/E in September.
They tore down most of the mom and pops because they could not make enough money to keep everything up to date or mismanaged the money they got and didn’t put enough back into it. They got offers and sold, that is not the developers fault (guess the developers are “they”).
Maybe if someone feels there is nothing for their kids to do and they are bored after 3 days, they need to go to Orlando instead.
I don’t disagree that some people just don’t like all the changes that have taken place, I would suggest to them that they need to go down the road to Mexico Beach, it has stayed pretty much the same for the last 20 years, really a very nice place but we prefer PCB, its beach, and all the great places to eat.
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Hazel we certainly are happy that you are coming to PCB for the Winter, since we bought our condo we have had Winter guests, actually you guys are our favorites as our unit always looks as nice when you leave as when you walked in the door. In fact we are leaving in the morning to do some work and changing a few thing out in preparation for our Snow Birds.
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Gregt
Thank you for the kind words regarding Snowbirds. We really do try to take good care of our / your condos. We appreciate that you would share “your home” with us. Our kids and grandchildren come in March. Grandma and Grandpa “Snowbirds” are more watchful and vigilant that our “visitors” are responsible and appreciate what is in reality “your home”. Every year they look forward to their “Spring Break in March”. They love PCB! Last year it was cold and windy, but as long as there is a heated pool, Pier Park, Gulf Word, Zoo, etc…they are happy!! By the way, since Pier Park…I have not been to Destin even one time for shopping and eating. I’m not impressed with the over kill of condos in PCB, but other than that, there is a lot of “positive” that out weighs the negative!!!!! Hopefully regarding the over kill…”If we build it, they will come.” is true….and they will!
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Interesting reading ! As a condo owner I can agree /disagree with many of the observations . We did fine this summer–lost a couple of renters who bailed, but re-rented with only a slight discount for one week. I rent without a mgmt. company and have average rates for my building. The condo is a well-done end unit on a mid floor of the building on the west end just past Pier Park. This is our eigthth or so place we have owned throughout Florida “flipping” the others for a profit every time (I HATE that term) This time however, the odds caught up with us and we are upside-down. We will weather the storm until it turns around tho’. Good luck to all !!
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I will start by saying I am not just a “new” tourist to PCB. My family have been returning each year since I was a baby in my fathers arms, I am now 52 yrs. old.
I remember a long time ago father staying on the West end of the beach in the old Georgian Terrace and then staying in the Fountain Blue, those were the days? Actually the Fountain Blue was then the largest hotel in PCB. Through out the many years as we came to PCB yes, we watched many changes from the standard Mom & Pop motels to BOOM…… the ever so massive Condo’s. The condo’s are simply beautiful!
I have to tell you “Changes” happen in all areas and often people do not accept change but…. they need too. I guess it’s one of the hardest things to do for some people but, you cannot have growth if you do not accept change.
If you ask me, I love the condo’s stretched out along the beach….. I only wish my father had lived to see what a beautiful sight this is in the dust of the evening looking ashore from standing out on one of many piers. The lights are gorgeous! I think my father would have approved also as my family does.
When I come down each year I rent from a condo owner one on one….. I do not need to rent from the actual place anymore & I find this fantastic.
Our family appreciates arriving for our vacation & staying in a large clean state of the art condo rather than a 2 bed one room unit of long ago.
One lady above mentioned the new Lake Town Warf……. it was closed for some time but, last week when I was in PCB it was great to see many cars there and window lights (showing guests) staying.
My brother and his family went down for a week stay in July …… they said things were as busy as they had seen it and waited in long lines to eat at the local restaurants. To me, this is a good sign that people are still traveling & vacationing. Yes, I am sure there was a drop in visitors due to oil reports and mainly up on the higher West end side of PCB but….. IF you love the beach and Panama City as our family does, YOU COME ON ANYWAY!
The owner of the condo I rented from offered us full money back if oil was on the beach…… I told her not to worry about that I’m coming down anyway & I will help pick it up! I love the beach. I will say I have had great success on renting condo’s directly from Vacation Rentals by Owners.com and I have passed this information along to many people I have met.
I do think when the news media reported this accident it was blown way out of proportion for some areas. I think people who were coming to the beach panicked & either stayed at home or went elsewhere (some of them).
All I can say is they missed a beautiful summer at the beach… I enjoyed my first week & soon I hope to enjoy my 2nd. week there in Oct. One of the most “Beautiful” beaches, Panama City Beach Florida.
Thank you!
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