While the initial throes of the pandemic did cause a temporary standstill, the pent-up demand for travel that followed hasn’t slowed down going into 2022.
The demand has spurred a slew of new hotel developments and short-term rentals that will increase the Pensacola area’s tourism capacity in the next few years.
There’s visible construction on new hotel sites like the Home2 Suites by Hilton on Bayou Boulevard where the Miles Antique Mall once stood, and numerous more hotel buildings are in planning phases like three Pensacola Beach towers recently announced, the East Garden District development downtown and the proposed hotel site at Maritime Park.
But can the area handle that much more capacity?
Based on how Tourism Development Tax spending has shot up and how high hotel occupancy got last summer, tourism officials think so.
“There’s definitely growth going on right now, but as always, you don’t want to be overbuilt in any certain period of time, so it’s a balance,” Visit Pensacola President/CEO Darien Schaefer said. “Right now, there’s a lot of interest in north Florida and we’re certainly taking advantage of that to create new travel habits.”
New hotel in vacant beach lot: Innisfree wants 11-story hotel tower with 2-story pool bar on vacant Pensacola Beach lot
Beach hospitality had record-breaking year: Despite COVID, Hurricane Sally and staffing, Pensacola-area hotels had record-breaking 2021
Schaefer said as of this week, there are 5,909 short-term rentals listed on sites Airbnb and VRBO, an increase of 900 from last year. As for hotel occupancy, last June saw occupancy hover at about 85% with numbers at about 55% through the slower winter months.
“Once you get (occupancy) over 60%, you see hotel developers looking to add more rooms to a market,” Schaefer said. “Hotel product is a commodity that expires at the end of every day and if you don’t sell it, you lose it, it’s not like a loaf of bread that can sit on the shelf another day.”
Innisfree Hotels plans three major Pensacola Beach developments
In recent months, Innisfree Hotels — already among the area’s largest employers — has announced three new projects that’ll bring hundreds more hotel rooms and condo spaces to Pensacola Beach.
Innisfree officials recently released renderings for a new construction project in the planning stages on a vacant lot on Via de Luna Drive, and there will also be the renovation of the Hampton Inn that will add another hotel tower and the rebuilding of the Hurricane Sally-damaged Best Western, which will become a Fairfield Inn and Suites resort.
Innisfree Hotels Vice President of Operations Jason Nicholson said that even though cruise ships, theme parks, and international travel are starting to pick back up, the booking rates for spring and summer locally have stayed strong.
“The market demand influences the trajectory and velocity of building cycles and when we speculate on an opportunity to purchase land, build a hotel or acquire a hotel we have to make sure the demand in that market will provide success or we won’t do it,” he said. “It’s not good for the local community, the business community and certainly not the bank loaning us the money (if a project is unsuccessful) so we carefully measure all that and we look at it consistently even in day-to-day operations.”
The TDT collections data shows increases higher than 20% over 2019 — often referenced as the last “normal” year of data — even without factoring in a new fifth-cent tax hotel and short-term rental owners are now paying.
Schaefer said strong occupancy is contributing to those strong TDT numbers, but maybe more so is an increase in daily hotel rates that have stayed higher than usual through the winter months.
For example, $220 per night was the average rate in July, but in December it stayed at $111, a $22 increase from the winter seasonal rate in 2020-2021.
“I think we’ve been in an adjustment so there may be a few people saying it’s more expensive than it used to be, but if you compare our rates to our peers to the left and right, we’re coming right in line to where they are,” Schaefer said.
Shift from ‘drive market’ tourism?
Tourism experts have talked in-depth about the Pensacola region being largely a “drive market,” meaning that the hotel guests and visitors often live within an eight-hour drive of the area, but Schaefer sees some of that shifting as the Pensacola airport increases domestic destinations and people expand their travel habits.
In Santa Rosa County, without a large airport nearby, areas like Navarre Beach have long been advertised as a drive market, according to Santa Rosa County Tourist Development Director Julie White.
She said Santa Rosa County differs from Escambia County in that there are few hotels and a larger percentage of vacation rentals, such as condos and homes, which are increasing in inventory as people either invest in a short-term rental or buy a second home and rent it out while it’s not being used personally.
“We’ve rebounded really well just like our neighbors did, which is good. I think the entire Gulf Coast is doing really well right now,” she said. “We’re ready for the season to start.”
Emma Kennedy can be reached at firstname.lastname@example.org or 850-480-6979.