Beach destinations can't rely on the outdoor attributes that made them so attractive to the domestic market during the pandemic now that international travel is fully open and fear of cities has evaporated.
Beach destinations are heading into the summer under a more competitive tourism environment under which their pandemic-powered visitation growth rates are likely to soften thanks to cities and international travel fully back in the traveler choice mix.
During the pandemic, rural, beach and other outdoor-centered destinations hit record visitation from people escaping cities, as captured in a 2022 Skift megatrend. These destinations saw explosive growth rates in 2021 and 2022. In Florida, Panama City Beach’s lodging tax revenue jumped by 50 percent from $23 million in 2018 to $36 million in 2021, said Dan Rowe, president and CEO of Visit Panama City Beach. For Myrtle Beach, 2021 was the strongest year they’ve “ever had in the history of tourism to Myrtle Beach,” South Carolina, said Karen Riordan, president and CEO of Visit Myrtle Beach.
Beaches were especially coveted for their warmer temperatures, fresh air and beautiful features. In California, Carmel-by-the-Sea’s white sand beaches, small population size and outdoor access hotels were a major draw to the walkable one-square mile village. “During the pandemic, that remained a very popular vacation option because we have the outdoor attractions,” said Amy Herzog, executive director for Visit Carmel-by-the-Sea, which saw a boom from pent-up demand and had higher than usual occupancy in 2021. Carmel-by-the-Sea is located in California.
New source markets came into play for beaches. Panama City Beach’s primary markets used to be Georgia, Alabama and Tennessee, said Rowe. That cohort has expanded to include the Midwest, the Upper Midwest, Texas and even Orlando, which is six hours away and has its own beaches.
The popularity inspired airlines to introduce direct flights from Kansas City and Denver. “Those are cities I wouldn’t necessarily think would fly here, but we have direct service,” said Rowe.
Growth rates remain strong but they are starting to soften for some. “Even for most of 2022, it started to level off at the fourth quarter of 2022 and now we’re back to more of a typical occupancy level,” said Carmel-by-the-Sea’s Herzog. Panama City Beach’s Rowe expects 2023 their growth rates to come down by a few points. Rural and remote destinations have been experiencing the same slow down.
Part of the reason is that international travel is fully open, and Americans are more comfortable than ever traveling abroad. In February 2023, 4.3 million Americans took international flights, up 53 percent from 2022 and 9 percent from February 2019, according to the National Travel and Tourism Office.
Big cities are also competitive again. Global cities are popular again, according to the World Travel and Tourism Council’s Cities Economic Impact report. New York City, for example, received over 55 million visitors last year and expects to receive over 60 million in 2023.
“As our big cities really come full force, not only do they have the product in terms of culture, arts, music, food, everything you would expect from a great American big city,” said Myrtle Beach’s Riordan. “They also have a marketing budget that’s been restored in many cases. And that’s been something we’ve been keeping an eye on.”
Beach destinations will emphasize they are more than sun and sand. Carmel-by-the-Sea plans to highlight its galleries, culinary and other experiences, said Herzog. The town of 3,700 has grown its culinary scene with young talented chefs.
To “aggressively” diversify, Myrtle Beach has been promoting its live music and especially its culinary scene these last two years, said Riordan. Last year, it launched a reality TV cooking competition show called Chef Swap at the Beach that showcased its local restaurants and chefs.
Panama City Beach is diversifying by embracing sports tourism. The destination opened its second large-scale outdoor sports park in 2019 and it has paid dividends.“It is very very strong and it’s continuing to grow,” said Rowe. “We do a lot of small meetings and conferences in the area that we’re going to continue to look at to diversify into that market.”
Similarly, sports, especially youth sports, will be a strong growth spot for Myrtle Beach. The destination will host the World’s Strongest Man for the first time. “Our meetings are back, our convention centers are full, but it’s really our youth sports that seems to be inflation proof,” said Riordan.
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Photo credit: Beach destinations are operating in a more competitive tourism environment. Zany Jadraque / Unsplash