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Vero Beach tourism down in 2009, but better than expected

A confluence of factors may have mitigated the effects of the economic downturn, making for a somewhat better ’09 tourist season than we might reasonably have expected on Vero’s beach.

The biggest news was that Miami, not New York or Connecticut, supplied a surge of visitors. In hotels, restaurants, and shops, the usual snowbirds rubbed wings with shorebirds – people who already live along the south Florida coastline, but want to get away from congestion there and enjoy the natural beauty of the Vero barrier island.

Though the financial crisis meant many would-be visitors stayed home altogether, for others who couldn’t deny themselves a break, Vero provided a welcome change of scenery a short drive away.

Two destination resorts, both fully operational for their first season, sent a new stream of shoppers and diners into the beachside business district for the first time since the twin hurricanes in 2004.

At the same time, those who came apparently spent less and didn’t stay as long. Ultra-luxury suites sat empty, while bargain hotel rates and prix-fixe menus were the focus of attention.

A new need for children’s menus was evidenced by an increasing number of young families vacationing here, a demographic shift that may one day bode well on a range of economic fronts, from private schooling to single-family-home sales as a new group looks at adopting the Vero lifestyle fulltime.

“Our demographic is definitely younger, from 35 to 55,” says Monica Smiley, director of sales and marketing for Costa d’Este, the resort hotel that opened last summer, owned by Gloria and Emilio Estefan. “I’m surprised that we have as many kids coming to the hotel as we do. We have a limited number of rooms with two double beds, but we definitely get families.”

Perhaps most significantly, businesses report seeing increased numbers of visitors from South Florida, suggesting that Vero Beach has replaced Palm Beach as the northernmost getaway destination in the exodus from urban congestion.

“Miami is our number-one market,” says Smiley. “It’s not that we market down there, but we get a lot of public relations. Latin American TV shows talk about us, and some marketing took place at (Miami’s) South Beach Wine and Food Festival. People are saying, ‘Well, if Gloria likes Vero Beach, let’s see if we like it.’ ”

“It’s surprising, and for me it’s exciting,” says Boris Gonzalez, owner of a local boutique hotel and restaurant, whose late father, Jorge Gonzalez, founded the Moorings in the 1970s. Gonzalez finds himself staying closer to home as he travels to sign up groups as future guests. “Where I used to go to New York and DC, now I’m going to Miami. South Florida is coming up to see us,” he says.

“I always remember, back when my dad was trying to promote Vero, it was mostly in the north,” says Gonzalez. “Now it’s from the south.”

While hotels appear to have maintained a healthy occupancy rate, most achieved it by reducing rates, some, like Gonzalez, by as much as a third.

That drop in prices, as well as significantly lowered rates for seasonal rental properties is reflected in falling tourist tax revenue. Indian River County officials report a sharp drop in the tourist development tax over last year in both January and February, to the lowest levels since the tax was set at four percent in 2002.

Revenue fell 26.2% in February, and 22.5% in January. March numbers have not yet been tallied; typically the month is the season’s strongest. Year-to-year comparisons are expected to be disappointing given that March 2008 was the best on record.

The tax is levied to promote tourist-related cultural activities, including paying off a debt on the Dodgertown sports complex as well as beach restoration. The revenue shortfall for February alone is more than $50,000.

Dodgertown, meanwhile, stood unused this spring. At the same time, the Vero Beach Hotel and Spa reported a drop in stays of a week or more, attributable, management says, to the fact that the Dodgers baseball team no longer trains in Vero, and players aren’t bringing in their families to stay in the hotel’s twoand three-bedroom suites for a week or more, as they had when the hotel opened in February 2007.

The loss of the Dodgers’ presence was also felt by restaurants. But even as Charlie Replogle, longtime owner of the landmark Ocean Grill, braced for the anticipated decline in players dining there, he found the loss being offset by a stronger lunch business.

“Frankly, with the Dodgers not being here, lunch is better. People aren’t going to baseball games,” he said.

Replogle thinks the renovated Sexton Plaza, on which the Ocean Grill fronts, helped draw in customers, as well as the addition of Coste d’Este resort, a short stroll away. All told, he considered the season a good one.

This season marked the first for The Vero Beach Hotel and Spa as part of the Kimpton hotel group. “The first quarter of this year, we ran pretty good occupancy rates of around 80 percent,” says general manager Marco Scherer. “We had done a lot of promotion and we made some really attractive rates, and we saw a high number of out-of-state guests as a result. Two weeks before Easter, we were sold out completely. We had 350 to 400 adults running around with kids. Our pool area was really busy, and the whole staff was working overtime to get through it.”

“Jo Bailey is doing a good job promoting the Vero Beach Hotel and Spa, and of course we have to give credit to Gloria (Estefan, owner of Costa d’Este),” says Boris Gonzalez. “People who stay at those hotels end up coming to my restaurant, and I send my hotel guests to their restaurants. I think it’s good for all of us in Vero, and a number of people are looking at the area to buy a home.”

Those crowds spill out onto Ocean Drive businesses as well.

“Maybe the hotels don’t have as many people as they’d hoped for, but weekends are very busy here,” says Nancy Cook, longtime owner of the Twig women’s resortwear boutique, across Ocean Drive from the Costa d’Este resort. “We hear really great things about all the hotels.”

A smaller boutique hotel, the 18-room Caribbean Court, dropped its peak-season rates from $239 to $159 for its basic room; and $299 to $249 for its luxury rooms. Owner Gonzalez, who also owns what many consider to be the beach’s highest-end restaurant, Maison Martinique, said “it was a great season with the restaurant, and it would have been a great season for the hotel if we had kept our regular prices. Instead we discounted them rather severely.”

Gonzalez was making a presentation in Miami last week, hoping to firm up a reservation for a conference that would book all his rooms for four to five days.

“I’m really hoping for more groups,” he says. “Not just weddings, but small conferences that want a more intimate hotel.” One group that came twice last year returned again this season, and has already booked for October.

Other businesses report seeing an increase in the number of destination weddings being staged here. At least two took place last weekend, including one from California, said one merchant, who reports an uptick in the sale of dressy dresses.

Last Friday, Brian Gilbert hosted a wedding party for 120 on Black Pearl’s outdoor terrace.

“We’ve been told that in the summer there are going to be a lot of weddings, and that’s a fresh group of people coming to down,” says Nancy Cook.

“If the hotels are going to do well, then we all are going to do well,” says Gilbert. He hopes that Costa d’Este’s presence will greatly expand from its launch last summer. “And if Vero Beach Hotel can keep packing them in, we’ll be lucky,” he says.

Beachside businesses drew from the so-called “loyalty” visitors coming back to the Vero Beach Hotel and Spa, which, though it opened partially two years ago, was only fully completed this past year. The Costa d’Este resort opened last summer. Both hotels have popular restaurants and lounges, as well as outdoor oceanfront bars.

“The hotels have been a wonderful addition to the vitality here,” says Cook.

Smiley returned last week from a “destination blitz” marketing effort along with other business owners and Lori Burns of the Chamber of Commerce, promoting Vero to travel agents and meeting planners in Orlando and Tampa. Over and over, she says, people said how impressed they were at the cooperation between local businesses here.

“We heard that again and again, people saying, ‘We have never had a destination sales blitz where everyone was saying nice stuff about each other.’ I think they really appreciated that we had such a common goal in that great group spirit. Of course, that’s par for the course for Vero.”

Marco Scherer, at the Vero Beach Hotel and Spa, says the hotel’s business has compared favorably to others within the Kimpton group. Last week, he and director of sales Jo Bailey traveled to Washington and Canada to “show off the hotel to some of our sales managers,” Scherer says. Word is spreading among the Kimpton family, he says: “A very high number of staff has come to try us out, and they fall in love.”

“It was really exciting to see how well we did compared to the rest of the country. It’s like we were living in a bubble,” Scherer says. “Hotels in urban areas depend on a corporate client base, and they are struggling. Corporations have cut back and those hotels in downtown areas just have not been as busy as we have. They have noticed a huge dropoff.”

Meanwhile, preparations for summer range from aggressive discounting to a sense of resignation, and at the very least, a chance to recharge for next year. As one vendor put it, summer is just a way to get to the next season.

With this being Costa d’Este’s first season, Smiley has no year-over-year comparison to make, though she had a strong opening last summer, and expects a repeat this year.

“Our season was good, but we’re finding we’re picking up more now,” says Smiley. “We feel that we might be a stronger summer property than even Season, based on demographics from Miami.”

Typically, the economic bar is set low for the summer months. “Last summer we did very well: we broke even,” says Gilbert.

Gonzalez plans to introduce a staytwo- nights, get-one-free package at Caribbean Court.

Costa d‘Este has $99 weekday specials, with weekend rates starting at $119, with a ten percent discount for Florida residents. There is also a stay-three-nights, get-the-fourth-night-free package.

The Vero Hotel and Spa is offering weekday basic rooms at $89 a night this summer.

It has also launched a nightly happy hour with an elegant array of $3 hors d’oeuvres to rev up its bar scene, as well as introducing new live music on weekends. Staff is wearing new uniforms thorugh the property.

The restaurant formerly called Indigo is now Cobalt, and Scherer is in the process of hiring a new chef. “The menu will be simplified a bit, with regional American cuisine with heavy emphasis on seafood,” he says.

As for filling rooms in the off season, Scherer is scrambling for summery concepts. “Our approach is come and try us out,” he says. “We’re going to be doing a playground summer promotion,” says Scherer. “We’ll have ice cream in the lobby for an hour every day, and we’re setting up a Wii for our adults to be able to play like the kids.”

Replogle at Ocean Grill is hoping for another summer with a strong European presence at the Disney Resort on the northern end of the island. “The Europeans come over with lots of kids and they go to the theme parks, then they want to see the ocean. We’re fairly kidfriendly, so Disney is a big force for us. They don’t know it, but they are,” he says.

“Disney generally runs at about 100 percent full in the summer. That tends to drift down to everybody else. Those people want to go out and eat. And those will be the telltale signs of what’s to come. Last year you had gas at $4.10. Right now we don’t. I don’t know if it’s going to be strong summer, but it’ll be livable.”

Brian Gilbert, who with wife Gloria bought the Black Pearl restaurant in January of last year, ran what he dubbed a “Recession Relief” menu all season “just to get people in the door.”

He also introduced a children’s menu to accommodate Disney guests and others.

“You have to cater to the children,” he says. “At this time especially. People aren’t going out as much, so you have to give them something just for kids.”

Gilbert is optimistic that Vero’s summer numbers will rise with Florida residents looking for close-to-home vacations. “If everybody stays in Florida, the people in South Florida are going to help tremendously,” he says.

Melinda Cooper, owner of Cooper and Company, a women’s designer boutique across from Vero Beach Hotel and Club, believes she has seen a welcome shift in attitude.

“The second week in April, everyone became much more optimistic. I think the country changed as well. I know we did in Vero Beach. Once the stock market started going back up, everyone has a different feeling.”

For Cooper the start of the season was especially slow. “January, February and March were much slower than they were last year. We started coming down a year ago.”

That season, ’08, followed a two year upward trend, that itself was preceded by two dismal years – ’04, when the hurricanes hit, forcing her to move her shop into a trailer through ’05.

Next month, Cooper heads to New York to buy resort wear for November – December delivery. “It will be interesting to see how the showrooms are going,” she says.

Meantime, the traveling trunk shows she schedules to stop here are reporting from other cities that they are having “tremendous” success, she says. “They’re doing extremely well.”

Nancy Cook says she is adjusting Twig’s inventory with the economy in mind. “Where we used to order six in a style or color, we’re backing that off and reordering as we need it,” she says. “But we’re still maintaining great inventories. When you consider the economy, I think we’re doing very well.

“Vero Beach has a lot of people in retirement, and almost everyone is invested in the stock market. People thought they were being conservative and doing everything they could to secure their futures. Then when they open their statements, and even though they didn’t do anything, they see their savings dwindle, they feel robbed.”

After such a long slog through challenging times, Cooper is turning wistfully metaphysical. “I saw a book in Barnes and Noble that the Mayan calendar predicts the world will end in 2012. Maybe that’ll get people spending,” she jokes. “What the heck? Buy some jewelry. Why not?”

Replogle remembers another threat not so abstract. “We’ve done this for so long, and kept records for so long, that even in the last recession, Vero was always a pretty good place for seasonal people who still want to get out out of the cold weather.

“You don’t necessarily have your best year, but it isn’t necessarily the end of the world.”

Replogle, whose restaurant rises on pilings overlooking the ocean, pauses for half a beat. “A hurricane is the end of the world.”