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Pinellas Told Not To Drop Ball On Tourism

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By TED JACKOVICS, The Tampa Tribune

Published: September 13, 2007

Updated: 09/12/2007 09:11 pm

CLEARWATER - Tourism can be Pinellas County's main defense against a faltering economy, but the industry must remain alert to problems - including raising hotel prices too high - a consultant warned Wednesday.

Walter Klages, president of Tampa-based Research Data Services, predicted that tourists visiting Pinellas would spend 2.5 percent more in 2008 while the number of overnight visitors there would increase by 2 percent.

'Tourism is an export business that sells rooms, services, food and merchandise to visitors,' Klages told the county's Tourist Development Council. 'Tourism will become more important to the economy than before.'

The economist said he was less concerned about a recession than about a less intensive economic retraction, given the widespread shift to a world economy.

Other appraisals about the chances for recession seem to vary by the number of economists who are asked. On Wednesday, a survey of economists done by WSJ.com pegged the recession risk at 36 percent, up from a 28 percent probability a month earlier.

Three-fourths of the 52 economists responding to the recession question put the odds at or above 30 percent, and 11 put the odds at 50 percent or better. The range was wide, from 5 percent to 90 percent.

Only one out of eight economists in the WSJ.com survey said the credit crisis, with related market turmoil, has mostly run its course.

'The economy has been juiced by this rapid credit expansion, and I think that's over,' said Steve East, chief economist at Friedman, Billings, Ramsey, who put recession odds at 60 percent.

'That's the message of the credit market turmoil: The economy is not going to have as much high-octane fuel to run on,' East said.

Still, tourism continues to chug along in Pinellas County. Some 5.3 million overnight visitors spent $3.2 billion in 2006. Through July this year, tourism spending is 4.1 percent ahead of what was spent for the first seven months of 2006, according to Klages.

Expenditures have increased despite a 1.5 percent decrease in room nights, one indicator that hotel rates and other consumer prices are rising. Average hotel rates in July reached $111.74, compared with $108.42 in July 2006.

Some Pinellas hotels have surpassed the $500 rack rate, the highest posted daily price, but Klages said Pinellas hoteliers appear to be more cautious than elsewhere. That includes Naples and the Miami area, where there's been some traveler fallout from higher room rates.

Other factors that impact tourism also bear scrutiny, especially given the volatile nature of the economy and ever-changing demands of travelers. Those include:

• Poor Midwest economies. Ohio and Michigan are suffering, and visitors to Pinellas from the Midwest, Pinellas' largest feeder market with 1.7 million visitors in 2006, declined 0.2 percent the first seven months of this year.

• A low number of Latin American visitors. Latin America accounted for just 25,740 visitors in 2006, 0.5 percent of the county's total. Visitors from Latin America during the peak winter season this year declined 6.4 percent compared with a year ago.

Tampa Bay lags the Miami area in being 'bilingual friendly,' and the area must compete not only with beach destinations but U.S. ski resorts in Colorado, Utah and Idaho, tourist council members said.

• Increased worldwide competition. 'You can't ride a subway in London without seeing an ad for travel to Dubai,' said St. Petersburg/Clearwater Area Convention Visitors Bureau Director D.T. Minich, regarding the Pinellas battle for European travelers, who amounted to 16.9 percent of the county's 2006 visitors. The same is true of Thailand as a popular, new travel destination for tourists.

• U.S. hassles for international travelers. Visas and airline travel continue to stymie efforts to attract European and Canadian visitors who would benefit from extremely favorable currency exchange values.

• A poor U.S. international image from the war in Iraq. 'It's not a case of the ugly American,' Klages said. 'It's about politics.'

'We must do more at the federal level to make travel here easier,' said Carlen Peterson, vice mayor of Clearwater and a tourist council member. 'And we do have an image problem.'

Reporter Ted Jackovics can be reached at (813) 259-7817 and tjackovics@tampatrib.com.

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