After two record-setting years, Volusia tourism weathers downturn in 2023
DAYTONA BEACH — After two record-setting years capped by two devastating storms, Volusia County's tourism industry took a downturn in 2023, but hoteliers and industry leaders are looking ahead to the coming year with resiliency and high expectations.
A little over a year after back-to-back tropical storms ravaged the Volusia County coast, ripping apart seawalls and destroying pool decks at beachside hotels and residential homes, that resiliency is obvious to visitor Jason Scharrer.
“Since the last time we were here, this past spring, we’ve noticed the improvements in cleaning up the beach area,” said Scharrer, 50, a regular visitor to Daytona Beach for years with his family from their home in Oshkosh, Wisconsin. “Things are getting picked up and reassembled. A year ago at this time, it was borderline dangerous to walk along the beach, with all the debris.”
After two record-setting years for tourism in Volusia County that reflected Florida’s status as the first domestic tourist destination to reopen as the nation emerged from the COVID-19 pandemic, the landscape has changed — and not just because of damage from tropical storms Ian and Nicole.
The world has reopened, offering travelers new options that range from cruises to trips abroad. At the same time, Ian and Nicole pounded the destination’s key beachside hotels, parks and attractions, turning “beach access” into a coveted hotel marquee sign for months along State Road A1A.
As the area’s tourism industry adapts to those factors, the destination continues to grapple with lingering obstacles to tourism growth. In Daytona Beach, that includes the less-than inviting first impression offered around the intersection of International Speedway Boulevard and State Road A1A, the gateway to the core tourist district of the World’s Most Famous Beach.
Amid all that, Volusia County’s tourist development tax collections for the fiscal year that concluded on Sept. 30 finished 3.51% below the year-end total for 2021-22, according to figures from the Volusia County Revenue Division.
In the key Halifax beachside tourism area, collections for the year were down 5.5% compared with the previous year. It’s a period that’s characterized as a “reset year” by many in the industry here.
“We’ve had a couple of spectacular years of record-setting gains in the Daytona Beach area and we’re now seeing those levels normalize,” said Lori Campbell Baker, executive director of the Daytona Beach Area Convention & Visitors Bureau.
“These trends are being seen not only in our destination, but throughout the state of Florida and even the rest of the United States. We know that some folks are venturing beyond our destination, doing bucket-list trips abroad. But the Daytona Beach area is a special place and continues to offer great experiences and value to everyone who visits.”
Orlando, other destinations also weathered declines
Indeed, other destinations also endured periods of decline this past year.
Orange County, home to Walt Disney World, experienced five months of year-over-year monthly declines in bed-tax collections until registering a 1% monthly increase in September. Even so, the county finished the fiscal year that concluded on Sept. 30 with a record collection of $359.3 million, a 6.8% increase over the previous year.
In Brevard County, bed-tax collections for the year were up 9.5% compared with 2021-22, according to Peter Cranis, executive director of the Space Coast Office of Tourism. He credited a bus schedule of Space X launches from Cape Canaveral for boosting visitor interest in the destination.
Statewide, total tourist development tax collections for the state’s 2022-23 fiscal year, which runs July 1-June 30, were $880,908,499, a 27% decline from the $1,202,280,184 collected in 2021-22, according to Florida Department of Revenue. That represents collections by 63 counties that implement the tax out of the state's total of 67 counties.
Statewide, the tourism-marketing agency Visit Florida in November estimated that 35.066 million visitors traveled to Florida during the third quarter of 2023, 1.4% more than during the same period a year ago and 7.9% above the total in pre-pandemic 2019.
The new numbers showed a rebound from a slight second-quarter dip, which industry leaders attributed to increased competition from destinations now reopened after the pandemic.
Visit Florida also stated that Florida welcomed 105.2 million visitors during the first nine months of the year, up from 104.5 million during the same period in 2022. Florida posted a full-year record of 137.4 million tourists in 2022.
In 2023, a reset year after 'grand slam' 2022
Before the storms, Volusia County also had just capped another robust year for tourism.
For the fiscal year that concluded on Sept. 30, 2022, record-high overall tourism bed-tax collections of $33.7 million countywide were more than 20% higher than the previous year, which also set a record.
The county collects a 6% 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.
It didn’t take long for the impact of the storms to be reflected, with monthly bed tax collections for November 2022, in the wake of the storms, down 15.6% countywide compared with the same month a year earlier. In the coastal districts of Halifax and Southeast Volusia, collections for the month were down 16.5% and 22.8%, respectively.
More: Daytona Beach tourism works to weather impact of tropical storms Ian and Nicole
This past summer also saw year-over-year monthly declines, with collections down 11.5% in June, part of a collective 1.76% drop for the first nine months of the 2022-23 fiscal year. More recently, the opening month of fiscal 2023-24, in October, also saw monthly numbers down by 9.7%, according to partial totals collected through mid-November, the latest figures available.
In case you missed it: In Daytona Beach, summer tourism cools compared with red-hot 2022. Why?
Although that’s not encouraging news, many hoteliers also characterize the declines as part of an expected trend as the world has reopened for travelers in the wake of the pandemic.
“We have been preparing for this leveling off as we began feeling and seeing these demand metrics,” said Jim Berkley, general manager of the 744-room Hilton Daytona Beach Oceanfront Resort, the area’s largest hotel. “It’s all been expected and, frankly, many would tell you — including myself — that the correction was less painful than we had anticipated.”
That opinion was echoed by Bob Davis, president and CEO of the Lodging & Hospitality Association of Volusia County, who has watched seasons come and go for six decades as a leader of Daytona Beach’s tourism industry.
“Last year was a great grand slam,” Davis said, “but this year was better than most. I predict that next year will be better than this year, with more meetings, more conventions and a slight increase in leisure travel as people are watching their budgets.”
Group business expected to thrive in 2024
For Davis, that optimism is fueled by the arrival of a new director for the county-run Ocean Center convention center.
Lynn Flanders, who started in mid-November at an annual salary of $172,620, previously worked as assistant general manager of the Cobb-Marietta Coliseum & Exhibit Hall Authority in Atlanta. A premier meeting facility, it includes a 144,000-square-foot exhibit hall, 25,000-square-foot ballroom, a 5,500-square-foot special event space, 20 meeting rooms, and four executive board rooms.
With a range of experience that includes a familiarity with sports venues and events, Flanders is poised to elevate the destination’s appeal to event planners, Davis said.
“Put on your seat belts,” Davis told members of the Tourist Development Council, an appointed board that advises the County Council on tourism matters, “because she’s going to take you for a ride to the next level.”
Berkley, of the Hilton, also is optimistic about the prospects for group business in the coming year.
“We will be up significantly in our group business (at the Hilton) in 2024 based on our (booking) pace,” Berkley said. “Group travel has rebounded tremendously and Daytona Beach continues to be a very viable meetings and event destination, especially for the associations, sports and youth markets.”
That prediction dovetails with the broader travel industry outlook, said Scott Smith, hospitality professor and director of graduate studies at the University of South Carolina in Columbia.
Although the advent of virtual meetings has impacted corporate travel planning, the appeal of in-person gatherings has started to re-emerge as COVID fades into the rearview, Smith said.
“People now long for the days of face-to-face interaction,” 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 beachfront Hilton.
“So even though a lot of meetings have transitioned to virtual, companies also have realized that they are not accomplishing their goals the way they would if they met in person.”
At the 212-room Shores Resort & Spa in Daytona Beach Shores, the prospect of an uptick in group business has softened the impact of a dip in leisure bookings, said Rob Burnetti, general manager.
“The group picture is more optimistic than the leisure side,” Burnetti said. “You see the demand, the phone calls coming in for group business. I think there’s a little backlog of groups that were not meeting during the pandemic.”
Daytona Aquarium among reasons for optimism in 2024
Looking ahead, tourism leaders also are optimistic about the prospect of new attractions and hotels expected to debut in the coming year.
The Daytona Aquarium & Rainforest Adventure, set to open in early 2024 in the former site of the Burlington Coat Factory store at the corner of International Speedway Boulevard and Nova Road, will feature a 110,000-gallon shark tank and 40 additional tanks with other marine life, as well as alligator, crocodile and snake habitats amid an indoor rainforest with plants and land animals.
“New exciting places to visit within the destination are always a plus for growth and developing more visitors,” said Berkley, of the Hilton.
Also keenly awaited is the grand opening of the beachfront Renaissance by Marriott Daytona Beach Oceanfront by Ormond Beach-based Premier Resorts & Management in the first quarter of 2024.
The new hotel will offer 190 guestrooms and suites, elevated dining, a pool, fitness center and over 8,000 square feet of meeting space. It represents a $45 million investment by the company to build a highly anticipated four-star resort on the site of the former Ocean Breeze Club at 640 N. Atlantic Ave. in the core tourist district.
“Daytona Beach is poised to increase room demand as the destination is upgrading its facilities and renovating its existing facilities,” said Domien Takx, Premier’s vice president of operations.
In addition to opening the new hotel, Premier is planning complete room renovations at its Holiday Inn Hotel & Suites Daytona Beach Oceanfront and Holiday Inn Express & Suites Daytona Beach Shores properties in late 2024, Takx said.
The latter hotel is still at work on pool deck repairs of damage received from Ian and Nicole, a process that has taken longer than anticipated due to factors that include environmental requirements related to turtle nesting season, Takx said.
Even so, the effects of the storms are no longer on the minds of guests arriving at the company’s hotels, he said.
“I would offer that very few travelers are avoiding our destination” due to storm-related issues, he said.
Challenge to improve core beachside tourist hub remains
As the area’s beaches rebound, the challenge to improve the experience for visitors in Daytona Beach’s core tourist hub around the Ocean Center continues to be a priority.
The destination needs to find a way to overcome its “reputation of being a low budget, economy, tired, abused town with little magnetisms outside of the newer Speedway activity,” said longtime hotelier Manoj Bhoola, president and CEO of Ormond Beach-based Elite Hospitality Inc.
Elite’s roster of area hotels includes the Ormond Beach Best Western Castillo Del Sol; the Best Western Plus International Speedway; Hampton Inn by Hilton Daytona Speedway Airport; and the Hilton Garden Inn at Daytona Beach International Airport.
This past spring, work began on a $30 million, 17-month makeover of the East ISB gateway from the Halifax River to A1A. A $9.2 million improvement project for A1A north of the ISB intersection also is funded for a projected starting date next year, according to the Florida Department of Transportation.
That work can’t be completed soon enough, said Berkley, of the Hilton.
At a recent meeting of the county’s Tourist Development Council, he said that hopes of future hotel development, new restaurants and businesses that could invigorate the core beachside area hinges on improving its appeal now to potential investors.
“The modernization of the optics of the destination is going to have to happen before anyone gets serious,” he said. “The arrival portal in our city looks worse than it has since I first started coming to Daytona in 1981. We need to stop trying to fool ourselves into thinking that’s OK.”
On a recent afternoon, several clusters of homeless people populated the Daytona Beach Bandshell behind the Ocean Walk Shoppes, where longtime anchor restaurant Sloppy Joe’s recently closed its doors after 13 years.
Hoteliers report that the homeless presence has increased since August when a U.S. District judge issued a preliminary injunction that temporarily blocked enforcement of Daytona Beach's panhandling ordinance that's been in place for four and a half years on First Amendment grounds.
Otherwise, the retail center was a virtual ghost town that afternoon, with only a handful of tourists browsing darkened windows of many closed businesses.
“They’ve got to fill the stores,” said Pat Kennell, 68, a retired police officer vacationing next door at the Wyndham Ocean Walk Resort. “Too many stores are empty. You’ve got to have places that are open.”
Generating genuine positive word-of-mouth about the destination’s appeal would amplify an effective “Beach On” marketing campaign being executed by the Daytona Beach CVB, said Rob Burnetti, general manager of The Shores Resort & Spa in Daytona Beach Shores.
“My personal feeling is that we in Daytona feel it has gotten better, but I don’t feel that message has fully reached the traveling public yet,” he said. “We’re doing what we can to get that message across, but it just hasn’t settled in to where people see that much difference in the destination.”
This article originally appeared on The Daytona Beach News-Journal: Volusia tourism takes downturn in 2023 after two record-setting years
