June Tourism up 19.9%

There’s been a lot of talk about bed tax lately, primarily because it is a good barometer of where the tourism market is.  May’s numbers were up just under 25%, and if you remember, at the beginning of the season, I predicted (conservatively) that we would see an average of around $2 million per month for the May to August reporting period.  We’ll discuss where we are with that in a few.

June 2012’s bed tax collection was $2,737,780.66, or an astounding 19.9% increase over June 2011.

A close look at the numbers.
  • June 2012 – $2,737,780.66 – single point: $373,055.95 – 19.88% up over previous year
  • June 2011 – $2,283,706.72 – single point: $407,766.53 – 21.2% up over previous year
  • June 2010 – $1,884,269.21 – single point: $389,286.91 – -3.2% down from previous year
  • June 2009 – $1,946,434.54 – single point: $376,853.84 – -4.5% down from previous year
  • June 2008 – $1,223,299.60 –  single point: $456,741.34 – 9.3% up over previous year
  • June 2007 – $1,119,167.86 – single point: $547,556.13

When considering the percentage of the bed tax, and doing a little reverse engineering, industry wide in Bay County, $54,755,613.20 was generated in room-night revenue.  That’s a lot of money spread around for one month.

The numbers from the previous months this year
  • May 2012 – $1,408,512 – up 24.95% over previous year
  • April 2012 – $1,270,835.84 – up 4.45% over previous year
  • March 2012 – $1,769,821.69 – up 19.38% over previous year
Predictions for July

While June was a little bit of a slow start for us at Panama City Beach Luxury Properties at 83% occupancy average across all our properties, July we had an average occupancy of 97% across the board.  Of course, looking at our average revenue per unit for July wouldn’t be fair, compared to July 2011 since we have a much higher concentration of higher-revenue properties this summer over last, but the number is fun anyways: $4290.17 per unit, which is 25% up over last year ($3424.91 average per unit).

Looking at the average percentage increases for the previous months (17.17%), and throwing in a little personal intuition, I think July will see a 23% increase in 2012 over 2011.

As far as our predicted average increase per month across the entire reporting season of May to August, right now we’re averaging $2,073,146.33, or .7% better than what I had predicted.  Not too shabby, if I don’t say so myself.  🙂

Bed Tax Revenue Soars in March

Tourism traffic was definitely up in March of this year as indicated by the latest bed tax revenue monthly report.  Year over year, March of this year was an astounding 19.4% up over last year.  Looking closer reveals an even more astounding 38% increase over 2009, our last “low” point over the last 6 years. In Bay County there is a tax collected on each vacation rental revenue dollar that is calculated as 5% of the total base rent rate of each stay.  This Bed Tax money is then appropriated to a variety of efforts to fund the general tourism marketing of our area.  Some funds marketing, some funds operational costs of handling the marketing operations, some funds renourshing our beach, etc.

A close look at the numbers.

With the oil spill a couple years ago, there was a lot of uncertainty as to what direction our local tourism industry was going to go. Last year (2011 season) being the first year out of that catastrophe, and seeing a 3.7% decrease in year over year bed tax collections, many were heavily concerned with how the 2011 summer would fare. Of course, we know, summer 2011 was a record breaking season, so those fears fortunately, were unfounded. Total Bed Tax dollars collected for March of 2012 were $1,769,821.69. This is 5% total of all the room-night revenue reported. Broken down by single percentage, this would be $353,964.34 per point collected. The total bed tax revenue collected for March of 2011 was $1,482,498.95. Again, broken down by single percentage, this would be $296,499.79. In doing year over year increase calculations, it’s important to break down the total revenue collected by single percentage because beginning in the 2008/2009 tourism season, 5% was collected but before it was 3%. Here is the total breakdown for March for all previous years back to 2007.

  • March 2010 – $1,539,121.49 – single point: $307,824.30 – 19.9% over previous year
  • March 2009 – $1,026,521.85 – single point: $256,630.46 – -5.3% down previous year
  • March 2008 – $813,079.54 – single point: $271,026.51 – 16.3% over previous year
  • March 2007 – $699,028.94 – single point: $233,009.65
Projections for April 2012

We’ve already offered our general prediction over the average increase projections for tourism season 2012. March 2012 bed tax revenue numbers were amazing, and if that’s any indication of what we’ll see for April, then we’re on a fast track to an amazing tourism season for this summer. I can speak for my own vacation rental company (PCBLP) in that April was certainly record breaking. We had a much better April than we did last year, but it’s difficult for me to tabulate the source as we were just getting rolling last April. Looking at average increases for April bed tax revenue over the last 6 years, we should see a minimum of 7% increase this year over last year. But I’m betting on a more dramatic increase that is founded on what we’ve seen the last 3 years, which would be a healthy 15.4%. I’m projecting our 2012 April bed tax collections to be $1,404,017.44 – give or take 3%. I love making predictions. We’ll see how close I get!

2012 Tourism Revenue Predictions

Every year we anxiously look forward to the tourism season, which consists mostly of about 8 months.  While we see tourists travel here year round, when you come to the beach, you usually want to get out in the water, so the higher concentration of tourists always falls in the summer.  Of course, the kids being out of school plays some part in that too, I suppose. 😉

A quick history

The last few years in the tourism industry has been an interesting ride.  We had the great pleasure of riding an appreciation wave where we saw real estate values sky-rocket.  Then, we subsequently saw a meltdown as we came off the inflated prices and realistic terms finally again began determining pricing.

We had a number of new economic developments in the area that made our beaches look significantly more attractive than they used to.  Some of the many changes include Pier Park, the relocation of the airport and a wide variety of new commercial, retail and dining establishments that have cropped up all over the beach.

As our area has grown, and more have made this their vacation spot, the demand for a greater variety of shops, restaurants, entertainment and attractions has slowly been met.

This is growth, my friend.  Sometimes it may seem slow, but it is definitely happening.

Tourism revenue numbers

Because accommodations are offered from endless mediums, including property management companies (like ours), full scale resorts, or private owners, it’s extremely difficult, nay impossible to gather occupancy rates market wide.

So, the way we typically determine market growth is by looking at bed tax revenue numbers.  But, as was explained to me earlier (which I have certainly considered in the past), just because we have a growing revenue number, it doesn’t mean we have more people coming to the beach.  Touche.

However, more money, DOES mean more growth, because greater revenue fuels expansion opportunities elsewhere.  And it also means that if more money is coming in with fewer people, then the pricing is going up, which then leads to an assumption that we are catering to a higher-end clientele.  But I digress.

Lets take a look at the data

Below is a breakdown of the raw data over the last few years.  We’ve requested historical data back to 1997 but haven’t gotten it just yet.  We should note that the amount of bed tax collected was 3% up until February 2009, 4% for March 2009, then beginning in April 2009 the rate was increased to 5%.

Here is the bed tax revenue – raw numbers.

Year 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011
October $234,657.08 $275,648.45 $294,466.36 $449,813.31 $521,278.79
November $152,119.34 $156,803.11 $129,672.93 $283,593.62 $284,476.90
December $135,088.52 $134,216.04 $135,185.94 $227,630.37 $247,747.78
January $176,654.76 $188,324.00 $195,818.39 $318,457.80 $306,667.93
February $244,156.99 $266,703.23 $320,373.55 $442,790.64 $483,178.62
March $699,028.94 $813,079.54 $1,026,521.85 $1,539,121.49 $1,482,498.95
April $563,079.34 $476,718.39 $909,851.39 $992,335.01 $1,216,652.89
May $629,292.94 $556,798.62 $998,779.40 $1,075,882.69 $1,127,340.30
June $1,119,167.86 $1,223,299.60 $1,946,434.54 $1,884,269.21 $2,283,706.72
July $1,389,711.37 $1,345,540.63 $2,302,863.86 $1,967,020.33 $2,966,961.49
August $532,047.94 $554,578.90 $947,596.17 $807,936.59 $1,086,541.59
September $397,000.56 $467,386.73 $795,698.44 $795,301.87 $928,161.56

And the best way we could compare year over year, same month numbers was to break down the whole number by each percentage point collected.  So, for the 2006/2007 through the period in which the rate was increased, we divided the total number by 3.  Then we did the same, for the respective points for February and March 2009, then the remaining periods through the 2010/2011 reporting period.

Here is what we got.

Year 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011
October $78,219.03 $91,882.82 $98,155.45 $89,962.66 $104,255.76
November $50,706.45 $52,267.70 $43,224.31 $56,718.72 $56,895.38
December $45,029.51 $44,738.68 $45,061.98 $45,526.07 $49,549.56
January $58,884.92 $62,774.67 $65,272.80 $63,691.56 $61,333.59
February $81,385.66 $88,901.08 $106,791.18 $88,558.13 $96,635.72
March $233,009.65 $271,026.51 $256,630.46 $307,824.30 $296,499.79
April $187,693.11 $158,906.13 $181,970.28 $198,467.00 $243,330.58
May $209,764.31 $185,599.54 $199,755.88 $215,176.54 $225,468.06
June $373,055.95 $407,766.53 $389,286.91 $376,853.84 $456,741.34
July $463,237.12 $448,513.54 $460,572.77 $393,404.07 $593,392.30
August $177,349.31 $184,859.63 $189,519.23 $161,587.32 $217,308.32
September $132,333.52 $155,795.58 $159,139.69 $159,060.37 $185,632.31

Then, we took those numbers and broke down the percentage increases year over year, comparing same month periods.

Year 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 Average
October 17.5% 6.8% -8.3% 15.9% 8.0%
November 3.1% -17.3% 31.2% 0.3% 4.3%
December -0.6% 0.7% 1.0% 8.8% 2.5%
January 6.6% 4.0% -2.4% -3.7% 1.1%
February 9.2% 20.1% -17.1% 9.1% 5.4%
March 16.3% -5.3% 19.9% -3.7% 6.8%
April -15.3% 14.5% 9.1% 22.6% 7.7%
May -11.5% 7.6% 7.7% 4.8% 2.2%
June 9.3% -4.5% -3.2% 21.2% 5.7%
July -3.2% 2.7% -14.6% 50.8% 8.9%
August 4.2% 2.5% -14.7% 34.5% 6.6%
September 17.7% 2.1% 0.0% 16.7% 9.1%

I think it’s fascinating to look at these numbers because you can actually watch the real estate market tumbling in the 2007/2008 period, and begin to see slight growth the following years.  Of course, with the exception of the 2009/2010 reporting period, where we had the oil spill, the growth was in the negative direction.

My prediction

I know, this is what you’ve been waiting for.  You’ve been wanting me to pull out my crystal ball and tell you what our growth will be like this upcoming summer.  Here goes!

There are a bunch of ways to do this.  For example, one can look at the average percentage increases in the last column in the last data set up above and average that out to a total 5.7% increase.  This approach would tell us that based on the historical averages over the last 5 reporting periods that we should see said percentage growth this year.

But I think we’re going to do better than that.  

I think we should use the 2008/2009 reporting period as the baseline.  That was the second year Pier Park was open, the year before the new airport came online and frankly the first year we would have begun seeing an explosive growth pattern (in my opinion) had we not had the oil spill in the gulf.

Looking at the periods from 2008/2009 and on, and averaging the monthly bed tax revenue collected during the months of May through August, we get the following numbers for average monthly bed tax revenue collected.

  • 2008/2009 — — $1,548,918.49
  • 2009/2010 — — $1,433,777.21 — — 7.4% down from 2008/2009
  • 2010/2011 — — $1,866,137.53 — — 30.2% up from 2009/2010 and 20.5% up from 2008/2009

So, now if we scratch out the 2009/2010 reporting period, and pretend it didn’t exist, then divide the percentage increase the 2009/2010 reporting period had over the 2008/2009 period (20.5%) by 2, we’d have a healthy 10.25% annual growth average.

Using this projection, our bed tax collections for the May-August 2011/2012 reporting period should average at $2,057,416.62 per month.

What does this mean?

Projecting an average 10% increase in bed tax revenue for our summer season doesn’t mean that everyone should expect to see a 10% increase in occupancy over last year, nor does it mean that we all should see a 10% increase in rental rates charged.  Some of my properties, we increased our prices by more than that, and bookings are fine.  And bookings seem to be coming in faster this year than last year as well.

But, a projected 10% increase this year is just a projection, and the way it will affect the tourism industry market-wide will vary as great as their are specks of sand on our beach.

But this is my prediction, and I’m sticking to it!

2011 Tourism Predictions- Staffing Spree

This is the third article in a series that explores 2011 Tourism Predictions for Panama City Beach.

“If you market it, you must be prepared to staff it”

This is a *statement liberated from Socrates’s, um- well, his lesser known cousin, ahem, **Heraclitus.

However, let’s not quarrel over the origins of the statement, and opt to simply take into consideration it’s message.

We’ve been marketing, promoting, negotiating and canoodling with every possible venue, avenue, social site and persons, to spread the good word.

The word being that Spring Break & the Summer Season of 2011, is bigger and now-with-more-sparkles, then this past year of troubled times. The campaign has been proving it’s success through various ways of tracking, and along with the success of inviting the masses into our community, we’ve properly followed through by reaching out to the employable community to help handle the welcomed influx.

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2011 Tourism Predictions – Resorts

This is the second article in a series that explores 2011 Tourism Predictions for Panama City Beach.

We’ve checked in with the airport, and now it’s time to turn our questioning minds to the resorts.

In an effort to snag an idea of early predictions for the 2011 season, we touched base for a little Q & A session, with Paul Wohlford, Vice President of Sales & Marketing for the Resort Collection of Panama City Beach.

Continue reading “2011 Tourism Predictions – Resorts”

New Airport Set to Triple Numbers 2011

This is the first article in a series that explores 2011 Tourism Predictions for Panama City Beach.

Spring is right around the corner, and along with the knowledge of the coming season, we’re finding that our town is divided into three parts. The Optimists, The Pessimists and The Realists.

At times, it looks as though the Realists Team and the Optimists Team are on the same page, leaving the Pessimists to bemoan, well – everything.

For the most part, the Panama City Beach community is fanning those beginning sparks of excitement, while remaining optimistically cautious, over the vast potential of the 2011 tourism season.

Instead of sitting around speculating any longer, we decided to check in with some of PCB’s seasoned pro’s, those business savvy locals, who’ve been through this whole tourism thing a time or two.

Continue reading “New Airport Set to Triple Numbers 2011”