Sandy Triggers Early Tourism

Story first appeared on HeraldTribune.com.

High tourist season has kicked into high gear in Southwest Florida, and many industry watchers point to Hurricane Sandy as a primary factor behind the earlier-than-usual influx of visitors.

Eager to escape the devastation or avoid repair woes brought by the superstorm that battered the Northeast last month, many tourists and seasonal residents appear to have headed south months earlier than they normally would, according to some local businesses, anecdotal traffic counts and Sarasota Vacation Rentals.

Though winter tourist season here traditionally ranges from January to April, restaurant owners  have noticed a definite pickup in customer traffic overall — and more than a few people from areas hardest hit by the storm.

In this case, the difference this month has been felt across the board at his three Sarasota area eateries.

Before Sandy, Southwest Florida was on pace to shatter visitor records, thanks in part to the continued glow from the May 2011 designation of Siesta Key's beach as No. 1 in the nation, pent-up demand, beefed up marketing efforts and an incrementally improved national economy.

Even with the recent influx, though, tourism officials are left wondering whether visitors from storm-ravaged regions will maintain their plans to travel this winter or reconsider, to focus time and money instead on rebuilding and repairs.

Tourism plays a major role in Southwest Florida's economy and the state's, accounting for one in every seven jobs. Statewide, it brings roughly 80 million visitors a year and more than $70 billion in spending.

Vacation rentals from Manatee to Charlotte counties are almost completely booked for the season, said a Sarasota-based real estate brokerage and property management company.

While advanced bookings are hovering near 90 percent overall, rentals near Sarasota's beaches like Siesta, Longboat and Lido keys are reporting expected occupancy rates of nearly 98 percent through the winter months. Longboat Condo Rentals are already nearing capacity, according to resort owners.

Almost all of Anna Maria Vacations' 200-plus units have been rented for the high season this year.

It is noticed that people are traveling in larger groups, and  bigger homes, with five to seven bedrooms, are what are rented first.

Although Southwest Florida has typically drawn the majority of its winter visitors from Michigan, Ohio, Pennsylvania and other Midwestern states, the Northeast and Mid-Atlantic have become increasingly important geographic areas for the region.

Thanks to flights to Sarasota-Bradenton International Airport by JetBlue — and formerly AirTran Airways from Baltimore — from New York and other cities, the region has greater access to tourists than ever before.

Despite the storm, Northeast marketing promotions are ongoing, officials from both Visit Sarasota County and the Bradenton-Area Convention Center and Visitor's Bureau note.

Pinellas County officials had signaled immediately after the storm that advertising dollars might be diverted away from New York.

Southwest Florida is not the only part of the state benefitting from the influx of seasonal snowbirds and transient travelers, though.

The Sunshine State as a whole also is on its way to a record-setting year for tourism, according to recent data released by Visit Florida, the state's tourism promotions entity.

Visit Florida estimates the state hosted nearly 22 million visitors during the third quarter, an increase of 3.5 percent compared with the same three-month period in 2011.

Of the third-quarter total, domestic travelers accounted for 18.9 million visitors, a 3.2 percent increase from a year before.

There also was a larger percentage increase in the number of Canadians who came to Florida — 4 percent — while the number of international travelers rose 5.5 percent.

Although most Canadian visitors have tended to winter in Fort Lauderdale and Orlando, the number of visitors from the Great White North who frequent the Sarasota-Bradenton area remains strong, said Michael MacKenzie, president of the Canadian Snowbird Association.

In 2011, tourism was up more than 10 percent. It is expected this year it's going to be even greater, with the Canadian dollar being on par with the United States' currency this year, more Canadians will want to travel, especially to Florida.

The boost in tourism activity also means more jobs and taxable sales for the state. Direct travel-related employment rose 1.5 percent to 1.02 million, a net addition of 15,000 positions, according to Visit Florida.

Tourism and recreation taxable sales from January through August, the last reported month, were $49 billion. That represented an increase of 7.5 percent from the same period in 2011.

With business up and more bookings expected in the initial months of 2013, some hoteliers have raised their average daily room rates, a move that had been limited by the Great Recession and more frugal travelers.

If projections hold, those increases will spread to area attractions and eateries as well.

Expanding Eateries Target Shuttered Sites
Originally Posted to the Wall Street Journal

As restaurant chains go out of business or prune their store counts in the tough economy, competitors are jumping on the opportunity to move into the vacated locations as a way to expand quickly and cheaply.

Restaurants can convert their competitors' closed sites to their own brands at a lower cost than building new restaurants from scratch, industry executives note. Incoming businesses also have the upper hand in negotiating rents with landlords stuck with empty restaurant space.

"You definitely have the bargaining power because you have all the vacancies, and landlords are aware of that," says Navin Nagrani, vice president of Hilco Real Estate LLC, which specializes in real-estate restructuring.

Buffalo Wild Wings Inc., a sports-themed bar chain based in Minneapolis, is one of the companies emphasizing conversions as it expands. Over the past two years, it has acquired eight Don Pablo's restaurants and turned them into new versions of its sports-themed bar chain. As of the end of the year, Buffalo Wild Wings had 560 sites.

[ Photos: Buffalo Wild Wings took over a Don Pablo's restaurant, above, in Fort Worth, Texas, converting it into a Buffalo Wild Wings that opened July 28, 2008. ]

It has also put in place a rebranding "SWAT Team" of construction, operations and other professionals who can take a vacated site and convert it in just a little more than five months.

Giving Buffalo Wild Wings a boost in pursuing the locations is the chain's balance sheet. "We don't have any debt and we have cash on the book so these are the kinds of opportunities that we can take advantage of" and the competition often can't, says Matt Brokl, a vice president and associate general counsel.

Conversions cost the chain at least 20% less than building a new restaurant from scratch, which can take up to 13 months, Mr. Brokl says. Others estimate the savings can be even greater. Gene Baldwin, a partner with the restructuring firm CRG Partners LLC, estimates that moving into an existing site can cut development costs in half.

While the restaurant industry has been hammered over the past couple of years by a consumer-spending pullback, lower real-estate and development costs and lower rents have emerged as a tailwind for those chains still in expansion mode.

Panera Bread Co. has been negotiating with landlords to move into several former Bennigan's locations since the parent company of the bar-and-grill chain filed for Chapter 7 liquidation last summer, according to Mike Nolan, the fast-casual chain's chief development officer.

"Our experience says the best time to grow, all else considered, is during times of recession," says Mr. Nolan.

Burger King Holdings Inc. is breathing new life into some of the hundreds of Starbucks Corp. locations closed by the coffee chain in response to the economic downturn.

"Who would've thought five or six years ago that we would ultimately be able to take over a conversion of a Starbucks location?" Burger King Executive Vice President Russell Klein said at a recent investor conference.

And a Chili's Grill & Bar operator in Ontario, Canada, has already inquired about moving into at least two former Outback Steakhouse locations after the latter chain pulled out of the Canadian market last week, says John Reale, president of global business development at Chili's parent company, Brinker International Inc.

In the fast-food sector, which has held up better than full-service restaurants because of its lower prices, the credit crunch is one of the factors making more sites available for conversion. According to Hilco Real Estate's Mr. Nagrani, unprofitable fast-food locations are having a hard time selling their sites to other franchisees and shutting their doors instead.

Of course, not all chains are scouting closed sites and not every closed location is suitable for a new restaurant to move in. Chipotle Mexican Grill Inc., which plans to open as many as 130 restaurants this year, says it has found that many possible conversion sites are less than desirable.

"We're finding that people who are closing restaurants tend to close bad locations and keep the good ones," says Chris Arnold, a Chipotle spokesman. "We're not willing to make concessions."