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Panama City Beach, Florida, Area Will Continue to Live and Die with College
 Students on Spring Break; No Replacement Market at this Point
By Ed Offley, The News Herald, Panama City, Fla.McClatchy-Tribune Business News

Jan. 23, 2007 - SOUTH WALTON -- The Bay County tourism industry for the foreseeable future will continue to live and die by college students on Spring Break. That was the blunt message to local tourism officials and business leaders at an all-day marketing retreat on Monday at Water-Color Inn in South Walton County to assess the upcoming 2007 tourist season and future trends in visitation to Panama City Beach.

Neither a transformed Panama City Beach waterfront, nor a new Bay County international airport, nor innovative marketing and advertising campaigns will have a substantial short-term impact on the basic tourism profile, experts said during an informal session of the Bay County Tourism Development Council.

"Without Spring Break, we would be able to shoot a cannon through Panama City Beach" without hitting anyone, warned Bob Warren, executive director of the Panama City Beach Convention and Visitors Bureau. "We do not have a replacement market at this point."

Marketing officials estimate that the 2007 Spring Break, running from late February through early April, will generate an estimated $60 million in direct expenditures at the beach and generate more than $500,000 in tax revenues. The combined marketing budget for 2007 Spring Break is $475,000, including $300,000 from government and $175,000 from corporate sponsors.

Bay County Commissioner Mike Thomas told the gathering that while Spring Break will remain the anchor of the tourism economy for the time being, it is important that both government and the private sector start planning for a more diversified tourist marked. "Nobody wants to kill Spring Break," Thomas said. "But we have to acknowledge that there are certain things that aren't here anymore," referring to the closure or demolition of a number of longstanding tourist attractions such as the Ocean Opry and Miracle Strip Amusement Park.

Warren told the gathering that his organization recently had surveyed area hotels, motels and condominium projects and learned that the number of rooms "available to college students" -- those renting to people under 25 -- has declined to 6,000 from 8,500, but that is not expected to cause a housing shortage for the upcoming season.

"Spring Break numbers for now are doing extremely well," Warren said.

Nevertheless, government officials and tourist industry leaders intently reviewed other figures that portend a potential long-range challenge for beach tourism overall.

Peter Yesavich, a tourism consultant with the firm Yesavich, Pepperdine, Brown & Russell, told attendees that this area faces several issues that he likened to the "triple witching hour" on Wall Street when large amounts of securities go on the market at once.

The three main challenges, Yesavich stated, are:

An explosion in rental inventory. Between 2005 and the end of 2007, the number of hotel, motel and condominium units on the Beach is projected to explode from 19,895 two years ago to 41,734 by the end of this year. Assuming that 70 percent of them are designated for tourism rentals, that means the Panama City Beach market will have an additional 2,464 units competing for essentially the same number of visitors.

Constrained tourism marketing resources. Officials and business leaders heard from Warren and Yesavich that their counterparts in Orlando have just kicked off a two-year, $68 million advertising and marketing campaign to boost visitation at Disney World and other attractions. By contrast, the total beach tourism development budget this year is only $5.4 million, including administrative costs as well as $1.2 earmarked for advertising programs. In fact, Yesavich noted, advertising to attract tourists to the beaches area has actually declined from $1.6 million in 2004-05 to $1.2 million in the current year.

Competition from other tourism sites. It is unlikely that Panama City Beach will be able to become a major convention site in the future even with the new airport, Yesavich said. Too many large cities such as Atlanta, Orlando and Jacksonville already have the infrastructure and transportation facilities to accommodate that lucrative market. And while Bay County does have several small convention centers such as the Bay Point Marriott, Edgewater Beach Resort and Boardwalk Beach Resort, they do not have the super-large capacity that facilities on those major "gateway" cities now have, he added.

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Copyright (c) 2007, The News Herald, Panama City, Fla.

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