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Through a Mix of Unlikely Guests and Perfect Beach Weather, Hotels in
 Florida's Panhandle Are Fuller this Year than Last Year

By Sara K. Clarke and Kevin Spear, The Orlando Sentinel, Fla.McClatchy-Tribune Regional News

June 26, 2010 --PANAMA CITY BEACH -- At the Pineapple Beach Resort, every unit is taken each night, and reservation rates are holding steady.

According to manager Josh Pryor, the few nights that the 20-unit hotel hasn't been booked solid, walk-in customers have taken the last rooms.

Through a mix of unlikely guests, massive media campaigns and perfect beach weather, hotels in Florida's Panhandle are fuller this year than last year, despite the growing presence of oil from the continuing spill in the Gulf of Mexico.

During the first three weeks of June, hotels in the Panhandle filled nearly seven of every 10 rooms, an increase of 5.4 percent from the same period in 2009, according to Smith Travel Research, which tracks hotel markets nationwide. Average prices were down just 4.4 percent from a year ago.

Though the boost in business is good for oil-wary hoteliers, industry insiders say the improved numbers can be deceiving because they don't include the region's large number of condo-unit rentals and because 2009 was a miserable season.

"Last year was a tough year for all of Florida because of the Great Recession," said Dan Rowe, chief executive officer of the Panama City Beach Convention & Visitors Bureau. "So being up from last year doesn't necessarily mean it's a gangbuster year."

The Panhandle's year-over-year increase in average occupancy is outpacing that of the state. That's due in part to a $25 million advertising campaign paid for by BP, media appearances on network-TV shows such as ABC's Good Morning America, and aggressive marketing by local destinations.

"We're creating events that we've never had to do before in the summer, just to make sure that people can come and have a good time in Panama City Beach without regard to what's happening in the Gulf," Rowe said.

Not everyone who's coming is a tourist -- nor is everyone spending like one.

Lee Paulson, desk clerk at the 32-room Rancho Inn in Apalachicola, said his entire hotel has been taken over indefinitely by a Texas company hired by BP for oil-spill response work in the environmentally sensitive Apalachicola Bay.

Yet filling every room every day hasn't been as profitable as the improved occupancy rate would suggest.

"We're actually taking a hit," said Paulson, because the room rate for the company's extended stay was negotiated down from the regular $85 a night for weekdays and $95 a night for weekends to a flat rate of $60 a day.

Oil-company employees, government workers and news-media representatives fill beds, but they aren't paying for margaritas by the pool after a day of shopping and spa treatments.

"There is no doubt that we are taking a hit, because those workers do not spend the discretionary dollars that a tourist does," said Carol Dover, president and chief executive officer of the Florida Restaurant & Lodging Association.

Several hotel operators in Panama City Beach, a popular coastal playground where tar balls have washed ashore sporadically, are at or near capacity.

Patrick Hazard, manager of the sprawling, 275-room Sandpiper Beacon Beach Resort, said that, earlier this year, he had expected an improved summer turnout. But he's not panicked by the crude spreading eastward in the Gulf.

"The oil isn't killing us," said Hazard, who said his rooms are nearly full each night, though he added: "Business could always be better."

On the beach in Destin, Joe Farley said his Holiday Inn has a 90-day peak season, a very small window of opportunity in which to make the bulk of his money for the year. Occupancy at the hotel, which is usually all but full in the summer, is down about 22 percent so far in June.

"Last Saturday was the first Saturday in six years that I've not been full in June," said Farley, general manager of the 239-room hotel. "We still have rooms to sell for this Friday and Saturday."

But not all Panhandle hotels are dependent on beach traffic.

At the Microtel Inn & Suites in Marianna, which caters to tourists heading for Walt Disney World along Interstate 10, things are going great, General Manager Lisa Goff said. Her hotel has been about 70 percent full for the month of June -- an improvement from last year.

When asked about the effects of the oil spill on business, Goff said: "I think we're just far enough away to where we're not going to see it as much."

Sara K. Clarke can be reached at skclarke@orlandosentinel.com or 407-420-5664. Kevin Spear can be reached at kspear@orlandosentinel.com or 407-420-5062.

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To see more of The Orlando Sentinel or to subscribe to the newspaper, go to http://www.OrlandoSentinel.com.

Copyright (c) 2010, The Orlando Sentinel, Fla.

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