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Florida Keys’ booming tourism leads to low unemployment

The print ad for the Florida Keys Tourist Development Council, with the picturesque Seven Mile Bridge leading into the blue ocean, touts the island-connecting Overseas Highway as “The Road to Recovery.”

During the past two years, the “get-away-from-it-all” vacation destination has become just what the doctor ordered for many visitors looking to relieve the stress of the recession. “Work has been such a hassle that my buddy and I decided we needed to go fishing,” said Roger Rayburn, a Chicago construction worker from Chicago who was having a beer at an Islamorada tiki bar. “So here we are.”

While the recession lingers in other parts of the country, the Keys economy is riding high, with a booming tourist industry leading the way. Occupancy rates are tops in the state at 83 percent, up from 70 percent in 2010. Average daily rates for lodging also are way up, from $179 a night two years ago to $235 now.

“In a way, we have kind of benefited from the gloom and doom situation elsewhere,” said Harold Wheeler, executive director of the Keys tourist development council.

The boom helped push Monroe County’s unemployment rate down to 4.9 percent in May, lowest in the state and lower than any county in at least 25 other states.

“It’s a big decline from the peak of 7.5 percent,” said Rebecca Rust, chief economist for the state’s Department of Economic Development.

Even 7.5 percent would sound good to most of Florida, which has an unemployment rate of 8.5 percent, but it was a high number for the island chain that regularly relies on foreign workers to fill the gaps not met by a local workforce that is especially transient due to the high cost of living.

That unemployment peak occurred in September 2010, at the end of a months long scare caused by the BP disaster that spewed oil for weeks into the north part of the Gulf of Mexico. Many would-be visitors to the Keys either canceled trips or simply didn’t book them, believing the gooey stuff already had made it to the islands or imminently would reach its shorelines.

But the leak was capped, with not one drop of oil reaching the Keys’ beaches or its diving reefs, boating waters and fishing grounds. Happy times returned for the tourist industry — the economic engine that drives the economy and accounts directly for about 33 percent of the county workforce of 48,138.

“Monroe County is a rare tourist destination,” Wheeler said. “Usually one or two cities are a tourist destination. Our whole county is — from Key Largo to Key West.”

An analysis from the state’s Department of Economic Opportunity found the Keys’ low unemployment rate is attributed primarily to tourism and the military bases: the U.S. Naval Air Station at Boca Chica and the U.S. Coast Guard in Key West, with substations in Marathon and Islamorada.

The workforce of the Naval Air Station and its “tenant commands” — which include the Joint Interagency Task Force South that battles the maritime drug war from a base on Navy property in Key West — has remained steady the past few years at about 3,000 active duty, civilians and contract workers. And, there’s no plan to downsize in the future, said Trice Denny, spokeswoman for the Naval Air Station.

Rust said the Keys are similar to the state’s Panhandle, where places like Pensacola also benefit from both tourism and military bases.

And Monroe County, like Escambia County, home to Pensacola, has benefited the past two years from large BP payouts. The Keys, with only 73,000 people, already has received a whopping $184 million. More payouts are expected for businesses and individuals in the island chain during the upcoming settlement process.

Jackie Harder, the former executive director of the Key Largo Chamber of Commerce, said the county’s economic strength also is based on its large percentage of small businesses, “and I’m talking very small businesses.”

Key Largo, with a population of less than 13,000, has about 1,200 business licenses. “To me, we almost have micro businesses — even a 10-employee company is big in the Keys,” said Harder, who recently left the chamber to start Key Dynamics, which provides coaching and marketing consultation to small businesses.

“Small companies are closer to the ground and have the greatest flexibility to adapt,” she said. “They can make changes much faster than a Ford Motor Co.”

Pilates in Paradise added classes on standup paddleboards, Key Largo Chocolates now sells ice cream and Pearl’s Rainbow, a guesthouse in Key West, went from all-lesbian to all-inclusive and now is called Pearl’s Key West.

Rick Beasley, executive director of the South Florida Workforce, said his region considers a firm with 250 employees or more to be large. “I don’t know too many of them in Monroe County,” he said. “Most are mom and pops that help generate the economy.”

A 2010 Florida Enterprise report listed only six private sector employers in the Keys with more than 250 employees: Kmart, two hospital companies, Historic Tours of America, Hawks Cay Resort and Publix.

Beasley said the strategy of getting people back to work in Monroe County is a bit different from what applies to the rest of South Florida because of all the small businesses. One strategy it uses is subsidizing the wages of on-the-job trainees.

Greg Baumann, director of the Small Business Development Center in Key West, said he’s been busier than ever this year: “The entrepreneurial spirit is alive in the Keys.”

Several people have come for the free help to start water-related businesses: personal watercraft rentals, charter boat fishing and water adventures. “There aren’t any large businesses that have a monopoly, so it’s easier for the small business owners here,” he said.

Another reason unemployment for the Keys never came close to approaching double digits during the recession is its lack of manufacturing, an industry whose massive job losses have hurt many areas.

And although Monroe County was hit hard by the housing market collapse and related loss of construction jobs, “a lot of our contractors were coming out of Miami-Dade County. So they actually are Dade County’s unemployed folks,” Baumann said.

Now, the Keys housing market is rebounding faster than in most of the state. The average sales price for a single family home in Monroe County, which plummeted from a peak of $989,745 in 2006 to $532,000 in 2010, has begun to rise again. Last year, the average sales price was $572,000 and the upward trend appears to be continuing for this year.

The penny state sales tax collected in Monroe County for infrastructure, an indication of spending, also went up from 2010 to 2011 and is expected to rise this year.

But the Keys forecast is not all rosy for job seekers. In 2011, Monroe County’s annual average wage was $31,762, slightly down from $32,839 a year ago and well below the statewide average of $42,311. It’s primarily due to the large number of low-paying service and retail jobs.

In 2010, even when the Keys tourism industry was struggling, there were 3.8 million visitors, with 2.5 million of them spending at least one night. Wheeler of the tourist development council said it has helped greatly that the island chain has been able to stay out of the dreaded cone of brewing hurricanes the past few years.

So while residents of the Keys grumble when tourists clog up The Road to Recovery — the Overseas Highway — they also are thankful they are here.

“Since I moved to the Keys in 1975, this is my fourth major economic downturn,” Harder said. “Because of tourism, the Keys seem to enter the downturns later and come out of it sooner. People always need to take a break, even in bad times.”