Summer's here. Will crowds follow? Beach businesses are hopeful

Hotel owners and merchants are counting on the Memorial Day weekend to shove them out of a recessionary slump and into a healthier tourist season this summer. They already smell the first scents of an upturn.

"I'm optimistically cautious," said Jimmy Capps, the owner and general manager of The Breakers Resort Inn in Virginia Beach. "The first 15 days in May have been pretty solid. If you compare them with three years ago, it may not be as good as they were, but it's a little better than last year."

Capps said he'd be happy with 50 percent occupancy this weekend, "but I'm encouraged by what's coming in for the summer season."

Verne Burlage, president and owner of Quality Inn & Suites Oceanfront and president of the Virginia Beach Hotel-Motel Association, pegged the start of the tourism downturn to Labor Day last year.

"When they heard about the crisis in the banks and the layoffs and the stock market dropping, even if they weren't involved in the stock market, they felt their company could be threatened," Burlage said. "I think people stopped spending at that point."

From September to March, many hotels in the city suffered revenue declines of 10 to 15 percent from the same period a year before, he said.

But "a lot of properties had a really good April," said Burlage, who shares Capps' upbeat outlook. "When they start talking more positively about the economy on the news, that makes the public more positive."

One byproduct of the recession, though, makes tourism forecasts more slippery: the growing tendency to procrastinate on vacation plans.

In Williamsburg, more than 200 hotel reservations for the first weekend of April weren't made until the Friday before, Colin Campbell, president of the Colonial Williamsburg Foundation, said in a recent speech.

"People are making decisions closer to their arrival, at the last minute," said Tom Shrout, a spokesman for the foundation. "They're not sure what they're going to do. They're not sure what their own situation is going to be."

The economic falloff might benefit the region as a tourist destination with its central location on the East Coast - making it less expensive to drive here - and its range of price options, hospitality officials said.

Or, as Bill Gambrell, the owner of Tautog's and Doc Taylor's restaurants in Virginia Beach, put it: "The challenges that we have in the economy make some things more preferable. It's more preferable to go to Virginia Beach than maybe to go to Miami Beach."

A national bellwether report recently offered ballast to the higher hopes: AAA predicted that 32.4 million people will travel this weekend, up 1.5 percent from last year after nearly a 10 percent decline in 2008. AAA attributed the projected tourism increase to a decline in gas prices since last year and a growth in travel bargains.

On the other hand, CareerBuilder's annual vacation survey found that 41 percent of retail workers said they aren't planning a vacation in 2009. And John Challenger, a Chicago consultant, last week hypothesized another factor: People may be less likely to go far away for vacation for fear they will be laid off.

"Being out of sight could lead to being out of a job," Challenger said.

David Garraty, an economist at Virginia Wesleyan College, said the area will benefit from the relatively lower gas prices and its proximity to several regions. But, he said, it still must surmount the overall economic dip and the decline of the Canadian dollar, which could detour tourists from Canada.

In the past year, data show a mixed to dreary picture of tourism revenue locally:

n Revenue per available room - the industry standard to measure profitability in the hotel industry - fell 4 percent last year in Virginia Beach and 6 percent in Norfolk and Portsmouth combined, according to data from Smith Travel Research in Hendersonville, Tenn.

In the first four months of 2009, it went down 6.5 percent in Virginia Beach and 4 percent in Norfolk and Portsmouth compared with the same period in 2008, according to Smith Travel.

Tony DiFilippo, president and chief executive officer of the Norfolk Convention & Visitors Bureau, said the commissioning of the aircraft carrier George H.W. Bush filled "a lot of rooms" in January.

About 40 percent of the city's hotel business comes from conventions, DiFilippo said, and he's expecting nearly 5,000 bookings from two this summer - meetings of the National Organization of Black Law Enforcement Executives and the Student Youth Travel Association.

n Colonial Williamsburg reported selling 707,000 general-admission tickets last year, down about 9 percent from 780,000 in 2007. Shrout said he could not provide figures for early 2009, but Campbell said in his speech that ticket sales and occupancy rates rose last month.

n In Dare County, N.C., revenue for hotels, campgrounds and rentals rose nearly 3 percent last year, to nearly $350 million, but restaurant revenue fell 2.1 percent, to $185 million, according to data from the Outer Banks Visitors Bureau.

"We think people are still going to take a vacation, but maybe they won't eat out quite as much," said Aaron Tuell, a spokesman for the agency.

In the first three months of 2009, hotel and meal receipts both were down sharply, by nearly 13 percent for hotels and 11 percent for meals, Tuell said. That was partly because Easter fell in April this year but in March last year, he said.

Tuell corroborated AAA's account of an ample array of travel bargains. More owners of rental properties, he said, are offering specials such as job-loss insurance and a free weekend in the fall as a bonus for renting for a week during the peak season. Rentals for three or four days, once verboten, also are growing more common, he said.

Likewise, The Breakers Resort Inn in Virginia Beach is offering "Breakaway Bargain Days," with deals such as 25 percent off for this Monday through Wednesday, Capps said.

"Everyone's waiting for the last minute. Everyone's looking for a deal," said DiFilippo, of the Norfolk convention bureau. "Cheap is chic right now."

At The Globe, a novelty and gift shop on Laskin Road, "people are still buying birthday presents and wedding gifts, but they may not be splurging for the extra item for themselves," owner Ann Pavilack said.

Like Burlage, the Virginia Beach hotel owner, Pavilack said she thinks the key is consumer psychology, and she's sensing a return to positive thinking.

"I see a huge change in people's attitudes right now," she said. "They're coming in happier. They don't want to talk about the economy anymore. They're tired of listening to gloom and doom.

"People almost have the mind set now that 'I'm going to be happy, I'm going to be careful, but let's move on.' "

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com