South Florida economy hoping for a fall pickup
Labor Day marks the unofficial end of summer. The season brought stalled hiring and slower tourism growth, but housing continues an upswing.
08/29/2012 5:00 AM
08/29/2012 11:21 PM
South Florida’s economy needs to shake off its summer slump.
After strong growth to start the year, hiring remains stalled throughout the region. The presidential election and Washington’s budget dramas have many businesses holding off on spending decisions until the political picture stabilizes. Consumers haven’t regained past optimism. Even tourism, which once led South Florida’s recovery, seems to have hit a plateau — raising the stakes for the upcoming Labor Day weekend.
“We’re expecting things to improve after Labor Day,’’ said Robert Finvarb, who owns Courtyard by Marriott hotels throughout the region. “We got off to a really good start, but in August, the bottom fell out.”
So far, the slump hasn’t touched the current star of the rebound: housing. Prices continue to bounce back from depressed lows, and builders once again see the demand for new houses and condos. The Federal Reserve’s Beige Book report on the nation’s economy, released Wednesday, cited the Sunshine State as a standout when it comes to construction.
Overall, the Fed declared the Southeast economy to be in a “modest’’ recovery — not great, but not a backslide, either. The local hiring numbers tell mostly the same story. While Broward hiring is up, Miami-Dade’s job growth hit its slowest pace in nearly two years last month. That’s thanks in part to a sharp slowdown in new hospitality jobs. The county’s overall hospitality sector saw its first back-to-back job losses since 2009. It was only a drop in 100 jobs in July, but that’s a big switch from the 5,000 hospitality jobs added as recently as March.
The latest Miami-Dade hotel occupancy figures available from Smith Travel Research show that the number dropped slightly in July compared to the last year, a trend continuing into August, though other metrics, including average rates, per-room revenue and room nights sold, have continued to improve. Statewide, second-quarter visitor numbers increased just 1.3 percent compared to 2011.
Tourism officials and executives say the slowdown simply proves that the runaway growth seen in the early stages of the economic recovery couldn’t last forever. The verdict on tourism this summer: good by some measures, not great by others. And certainly nowhere near as impressive as last year, when even the New York Times marveled at the summer crowds in Miami.
“No one anticipated the dramatic growth of last year,” said Rolando Aedo, chief marketing officer for the Greater Miami Convention & Visitors Bureau. “We all understood that that type of growth rate is unsustainable.”
Tropical Storm Isaac scared away some visitors last weekend, but hotels are expecting better business over the Labor Day holiday — even compared to last year.
“What we’re seeing from some of the hotels is they’re picking up reservations for people who thought they were going to take last weekend off and moved it to Labor Day weekend,” Broward tourism director Nicki Grossman said. “We’re getting a little bit of a bump.”
After promoting a “rain or shine” holiday weekend package featuring a host of free family activities, the 408-room Turnberry Isle Miami in Aventura was seeing an increase in last-minute bookings, said sales and marketing director James Gelfand.
He said that while he was monitoring the recent spike in gas prices — the price of a gallon of regular was $3.93 in Miami on Wednesday — he didn’t expect much of an impact.
“While we are always concerned about the economic conditions that surround our guests, we have been fortunate not to have had any negative effect from the slight rise in gas prices that we’re currently seeing,” he said.
At the Eden Roc Renaissance in Miami Beach, tourists were already basking in the sun again by midweek following days of rain.
“We’re going to be servicing those customers that know this might be their last vacation for a while,” said sales and marketing director David Siguaw.
Still, Europe remains a significant threat as South Florida approaches the crucial winter tourism season. The Fed Beige Book noted Florida hospitality businesses reported a drop-off in European bookings, though reservations from Latin America compensated for the lost business.
Seven months after Carnival Corp.’s Costa Concordia capsized off Italy, cruise bookings also remain soft.
Even so, tourism spending remains at record levels in Miami-Dade and near records in Broward, according to state taxable-sales figures.
And despite weak consumer confidence, spending overall continues to climb in South Florida.
The latest figures from July show a 5 percent increase in taxable sales in Broward over the prior year, and an 8 percent increase in Miami-Dade. In fact, Miami-Dade is now less than 1 percent below its prior record in taxable sales, set in March 2007. In Broward, where foreign dollars don’t flow as freely, spending is still 13 percent below past peaks.
Growing sales throughout 2012 have businesses ready to expand payrolls, said Sue Romanos, president of CareerXchange, a staffing firm with offices in Broward and Miami-Dade. She said the firms’ contracts for temporary workers continue to exceed last year’s totals. But the gains come with a discouraging twist: last year, more firms were turning to CareerXchange in search of permanent hires.
This year, companies don’t want to commit to keeping an employee longer than they have to.
“Companies are in a wait-and-see mode,’’ she said. “We don’t know what the tax code is going to be, we don’t know what the regulations are going to be, we don’t know what is going to happen with Obamacare. We’re waiting to see what happens with the election.”
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