DAYTONA BEACH — As coronavirus concerns ease, Volusia County tourism officials and hoteliers report the subsequent surge in visitors has yielded a welcome spike in daily hotel room rates.
That trend is reflected in a whopping 52% jump in tourism bed-tax collections for May compared with the same month in pre-pandemic May 2019.
“The rates have gone up; demand is there and we’ve been doing a fantastic job of selling our oceanfront, our beach and clean air,” said Bob Davis, president and CEO of the Lodging & Hospitality Association of Volusia County. “People are ready to come.”
The Volusia trend aligns with the fact that leisure travel continues to boom at destinations nationally — including the World’s Most Famous Beach — amid the rollout of vaccinations and easing of COVID-related restrictions.
In May, hotels, vacation rental properties and campgrounds throughout the county generated $2,820,717 in bed taxes, up 51.7% from $1,858,427 for the same month two years ago, before the coronavirus pandemic delivered its devastating blow to tourism worldwide in 2020.
That figure, reported by the Volusia County Revenue Division, obviously also eclipsed the $1,278,413 collected for pandemic-crippled May 2020. The newly released May collection figure outpaced the same month a year ago by 120.6%.
The county collects a 6 percent tourism tax on hotels and lodges with half of the revenues going to fund the county-run Ocean Center convention complex in Daytona Beach. The other half goes to the county’s three tourism ad authorities to market their respective areas — the Daytona Beach/Halifax area, Southeast Volusia and West Volusia — as tourist and special event destinations.
For the first eight months of the fiscal year that started on Oct. 1, countywide collections of $16,505,440 are 5.8% ahead of the $15,599,279 collected for the same period in pre-pandemic 2019. That figure also represents a 32.8% increase over the $12,419,942 collected for the first eight months of 2020.
“Yes, the (room) rates are higher,” said Evelyn Fine, president of Mid-Florida Marketing & Research.
Mid-Florida hasn’t yet calculated its monthly report for May on average daily room rates, revenue-per- available room and occupancy, but the trend has been upward since the unofficial start of the summer season on Memorial Day weekend, Fine said.
In its most recent report for April, Mid-Florida’s data reflected an average daily room rate among its 40-plus reporting hotels of $146.15, an 11.7% increase over the average rate of $130.75 for April 2019.
Also in April, revenue per available room, calculated by multiplying a hotel’s average daily rate by its occupancy rate, was $106.73, a 9.3% increase over the same month in 2019.
Meanwhile, demand for rooms has exploded, Fine said.
Average hotel occupancy for Easter weekend was 94%, yielding an average daily rate of $181.94 and revenue per available room of $170.18, according to Mid-Florida. Occupancy during Jeep Beach was 70%, with a daily rate of $204.94 and revenue per room of $144.42.
“I think hotels are definitely demanding and getting more for the rooms,” Fine said. “That’s been a trend ever since people started coming back, since Memorial Day. We’ve watched the rates go up higher and higher, even earlier in the year with Jeep Beach and the Easter holidays.”
‘Absolutely market driven’
In May, the big bed-tax collection increases weren’t powered by any special event, Fine said.
“It was absolutely market driven, what the market will bear,” Fine said. “It is incredible.”
A check of rates for Daytona Beach area hotels this weekend on travel site Expedia.com showed room rates of $158 a night at the Hilton Daytona Beach Oceanfront Resort; $350 a night at the newly opened Daytona Grande hotel; $309 a night at The Plaza Resort & Spa; $353 a night at the Hard Rock Hotel ; and $349 a night at The Shores Resort & Spa in Daytona Beach Shores.
At the 212-room Shores Resort & Spa, room rates have exceeded expectations in recent months, said Rob Burnetti, general manager.
“We’re reaching average rates that we haven’t reached in quite a while,” Burnetti said. “Our rates are as high as they have ever been in this time period.”
Over the July 4th weekend, room demand was a little bit lighter at his hotel than Burnetti expected, something he attributes to the weather but also potentially to the room rates.
“I’m sure that makes some people think twice or look elsewhere,” he said. “Our (Daytona Beach’s) reputation as a value destination is being tested right now. We’re seeing average rates higher than we have seen for quite some time and that opens us up to competition from markets that are usually more expensive than we are.
“Gas prices are up; airfare is up,” he said. “Rental car costs are up. It’s gotten a little more expensive to travel and I’m sure we felt some of that over the holiday weekend.”
Fine views the upward trend in room rates as part of the market’s welcome transition to a destination with more branded properties offering distinctive features and amenities, such as the Hard Rock Hotel and The Daytona Marriott Autograph Collection hotel at One Daytona.
“We’ve always been known as an affordable destination,” Fine said. “We’ve hung our hat on it for many years, but that was when we had fewer brand names, fewer full-service hotels with interesting destination restaurants in them.
“The market has changed and we have more to offer than before,” she said. “This is really good news.”
Rates expected to remain high
Demand for hotel rooms is expected to stay high through the summer and beyond, said Scott Smith, a hospitality professor and director of graduate studies at the University of South Carolina in Columbia.
“Leisure travel is absolutely going through the roof,” said Smith, who worked as director of convention services in the early 1990s at the Daytona Marriott, the hotel that is now the 744-room Hilton Daytona Beach Oceanfront Resort.
“If everything remains the same and there’s no re-spike of the pandemic, the rates will remain high,” he said. “People are traveling more. The pandemic has given us a readjustment of how we see things. The thinking is ‘Let’s not delay travel; let’s not delay treating ourselves well.’”
The dark cloud on the horizon is the ongoing labor shortage in the hotel industry, Smith said.
Many hotel workers laid-off during the pandemic have found other jobs, Smith said. Even if revenue from higher room rates were to result in increased wages for workers, that wouldn’t necessarily entice potential employees, he said.
“The reasoning has always been that if you pay a higher salary, people will beat down the door to come work for you. We’re not seeing that,” Smith said. “Some places have gone to $18 an hour and they are struggling just as much as folks paying $15 to get people to come work for them.
“For some workers, the thinking is, ‘Why go work for a hotel, where you have to do late nights and weekends, when you can go work at Target maybe for a few dollars less but have a better lifestyle?’ People are making decisions now based on lifestyle and not just money.”
For hotels, the need for quality workers is more crucial as guests pay more for rooms, Smith said.
“People don’t mind paying the extra rate, but they want service to match it,” he said. “If you’re paying more than you paid in past, but you get worse service, that will be a problem.”