Myrtle Beach area wraps up a solid summer

New flights, a new boardwalk and more marketing of the Grand Strand helped create a solid summer for tourism despite a still wobbly economy, and the momentum should continue into the fall, officials said.

Hotel gains ranged from fragile to near record-breaking, while attractions such as Broadway at the Beach and Ripley's properties say they have had steady growth. Hotel and condohotel occupancy far surpassed expectations - up about 8 percentage points from last year - and that upward trend is likely to continue, said Taylor Damonte, director of the Clay Brittain Jr. Center for Resort Tourism at Coastal Carolina University.

"The big picture is that we are now in the beginning stages of the new business cycle," Damonte said.

Rising occupancy will lead to higher hotel rates, Damonte said, and as revenue grows, developers will see the opportunity to build new hotels. Construction on new hotels could start again in three to five years, leading the industry toward growth not seen since 2006 or 2007, he said.

The major struggles for the tourism industry appear to be over, said Brad Dean, president and chief executive of the Myrtle Beach Area Chamber of Commerce.

"The last 18 months have been some of the most challenging times for our local industry," Dean said. "We've seen the turnaround, and we've been faring much better than other destinations. 2010 has turned out to be a good year, which we've desperately needed."

Causes for growth

Many factors led to growth this summer on the Grand Strand, Dean said. New flights to the area, more advertising and buzz surrounding the new boardwalk in Myrtle Beach all contributed to the turnaround, he said. The area also continues to bank on its reputation as an affordable destination at a time when vacationers are on a tighter budget, he said.

The Gulf oil spill contributed to tourism gains as well, although evidence is mostly anecdotal, Dean said. At the beginning of the year, the chamber increased its advertising in areas where residents typically travel to the Gulf, so when the spill happened in April, the Strand picked up some of those Gulf tourists.

Growth is likely being driven by long-haul travelers who were attracted by flights to new markets and increased advertising in those areas, Damonte said.

The airport added direct flights to Atlanta, Pittsburgh and Chicago this year, while adding new routes to destinations such as Dallas-Fort Worth and Grand Rapids, Mich. More than 117,000 passengers flew into Myrtle Beach International Airport in July, breaking an all-time record.

Occupancy statistics also indicate an increase in long-haul travelers, regardless of whether they drove or flew, Damonte said.

"The fact is that our midweek occupancy rates are up more than our weekend occupancy rates are, which suggests to me we're getting more longer length of stay ... and that suggests to me we're getting more long-haul travelers," Damonte said.

Hotel rates lag behind occupancy, only showing 3 percent growth this summer compared with the season in 2009, he said. That's a common phenomenon, he said, and rates will begin to catch up as occupancy continues to rise.

Strong numbers

Dunes Realty, which rents condos and beach houses, had its second best summer on record, up 15 percent compared to last year, owner Ryan Swaim said.

"We had the second best summer we've ever had in terms of occupancy," Swaim said. "Money wasn't quite as high as we've seen in the past, but it was still pretty doggone good, and it was better than we expected."

Swaim said he attributes the rise in occupancy to increased out-of-state advertising by the Myrtle Beach Area Chamber of Commerce, funded by the 1 percent sales tax for tourism promotion in Myrtle Beach that took effect in August 2009. The company usually gets most of its reservations from South Carolina, followed by North Carolina, he said, but Ohio ranked second for the first time this year, he said.

Swaim sits on the chamber's advertising and publicity committee and stepped down as head of the marketing committee at the end of June.

Time-share sales grew by about 30 percent at Defender Resorts' properties in Myrtle Beach, North Myrtle Beach and Garden City Beach, chairman and chief executive Ken McKelvey said. That's an improvement, but sales are still about 15 percent down from 2005 and 2006, he said.

Myrtle Beach appears to be faring better than its competing destinations, McKelvey said, comparing the local properties with Defender properties in Delaware, Florida, Massachusetts, Maryland and the Cayman Islands.

"The interesting thing is the further north you go - Ocean City, Md., for example - our business has not turned around as much," McKelvey said.

Some signs of weakness

The Sea Hawk Motel, 2801 S. Ocean Blvd. in Myrtle Beach, only had large gains in July, owner Fred Smith said. June was relatively flat compared to the same month last year, while the first of August had some gains, he said.

The number of guests rose dramatically, but they're not staying as long, requiring more time cleaning rooms and more cleaning supplies, which raises his cost, Smith said. Demographics have also shifted, he said.

"Normally you see a lot of retired people come in and you haven't seen any of that," Smith said.

The motel may also begin renting rooms on a weekly basis sooner than it has in past years, a sign of weak demand for hotels, he said. The weekly rentals fill the rooms at slow times, but only generate slightly more revenue than the cost of operating the motel, he said.

Attractions

Ripley's Attractions Myrtle Beach - which operates the aquarium at Broadway at the Beach and several Ocean Boulevard properties - had steady gains in business this summer, continuing a trend from 2009, general manager Peter MacIntyre said. The attractions appeal to tourists on a budget, which staved off the worst of the economic downturn, he said.

"We have a nice price point when people are watching their pocketbooks," he said.

Traffic at Broadway at the Beach has ramped up after a slow start between January and March, said Stephanie Webster, marketing director for Burroughs & Chapin Co. Inc., which owns Broadway. Year-to-date, visitation has risen 17 percent, she said.

"If I look at this time last year, it was hard to predict what the summer [2010] was going to hold," Webster said. "Everything we've put out there and everything we planned seemed to be better than expected."

Special events drove much of the traffic this year, Webster said. The complex added a second concert series, more fireworks displays and shows in conjunction with its 15th anniversary.

Outlook for the fall and beyond

Damonte and hoteliers said they expect continued growth early on in the fall but that may not last.

Damonte's survey of the tourism industry indicates weaker occupancy in the last half of September, he said. But it may be too soon to tell what the fall will bring because last-minute bookings rise in the shoulder seasons, he said. Damonte said he predicts growth will hold through October.

Dayton House hotel has strong reservations through September, but poor pre-sales in November and December, general manager Paul Garcia said

Beyond the shoulder seasons, the Strand will continue its upward trend and should have more growth next summer, Damonte said.

The increased out-of-market advertising has focused on drawing new visitors, and next year's major test is whether those vacationers return, Dean said.

Industry confidence may also lead to continued gains. Downtown business owners are more optimistic since the boardwalk opened at the start of the summer, and that should lead to continued growth next year, MacIntyre said.

"The attitude down there is like 180 degrees different," he said. "They are sprucing up businesses, investing capital in their businesses. They're thinking about change for next year."