Low summer 2006 bookings, TDC to increase advertising

Discussion in 'Rentals - Vacation' started by SoWalSally, Jun 10, 2006.

  1. SoWalSally

    SoWalSally Beach Fanatic

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    By Rachel Kyler

    People are changing the way they vacation and it?s evident in Walton County?s summer reservations.
    According to the Walton County Tourist Development Council, bookings are down for the 2006 summer season.
    This not necessarily due to lack of interest in South Walton beaches; April?s bed taxes were up more than 15 percent for this year. However, people are approaching vacation planning differently, said TDC Executive Director Kriss Titus.
    ?So much has changed,? she said.
    As the XY generation and ?echo boomers? are entering the rental market, there are more people registering for vacations ?on the spot,? Titus said.
    Busier schedules, uncertainty of vacation time and the advent of the Internet are causing people to schedule their vacations later.
    ?In today?s society, we?re more, ?What are we going to do tomorrow??? Titus said. ?It?s a lot more difficult for some people to schedule a year out.?
    In addition, Titus said increased availability of rental properties allow people to wait longer because they are not as concerned with securing a place. Cost is no longer the predominate factor. Renters have become increasingly concerned with ?added value,? like bike rentals, fitness centers, etc., Titus said.
    ?It?s a very competitive market,? Titus said. ?It?s a lot easier (for consumers) to make decisions.?
    Reports are also indicating that visitors are concerned about the shape of the beaches and the upcoming hurricane season.
    In an effort to encourage earlier bookings, the TDC moved $500,000 in contingence funds for a summer ad campaign to improve collections in the upcoming season.
    The new summer ad campaign, ?Our beaches are beautiful with great summer rates,? will focus on value and the beaches desirability.
    Regional ads will be placed in the Wall Street Journal targeting the South Atlanta District, which includes a large portion of the South East, and the Texas District, which covers Texas, Louisiana, Arkansas, Oklahoma Kansas and part of New Mexico.
    A strategic online campaign will target ?female family travel planners,? 35 to 54, with a household income in excess of $75,000 within South Walton?s top ten markets ? Atlanta, Nashville, Birmingham, Mobile, New Orleans, Memphis, Dallas, Huntsville, Montgomery and Tallahassee.
     
  2. GVM

    GVM Beach Lover

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    Reports are also indicating that visitors are concerned about the shape of the beaches and the upcoming hurricane season.


    Yah think?
     
  3. Beach Runner

    Beach Runner beats on hood

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    Not really because:
    (a) they can look at the photos and see that the beach is beautiful (yes, the beachfront owners have erosion problems, but that doesn't affect the renters' experience)
    (b) if there's a mandatory evacuation, they get their money back, and things don't have to be bad for a mandatory evacuation from a renter's point of view. Every time we've boarded up and left (prior to a mandatory evacuation), the weather was beautiful, and the guests were enjoying themselves.
    (c) we're as booked up as we want to be, yet keep getting more requests.
     
  4. SHELLY

    SHELLY SoWal Insider

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    Cost is no longer an object??? (Inflation, the economy, gas prices, tapped out equity....HELLO??)

    TDC: Keep thinking that money isn't an object when folks plan their vacation and you're missing a massive target audience.
    _______________________________

    Frazzled Wife w/3 Kids: Honey, look there are two places for rent in SoWal. One is $1200 per week and the other is $1500 per week

    Husband (looking up from the bill pay screen): Is one closer to the beach?

    FW w/3 Kids: No, actually they are in the same condo on the same floor, but the one for $1500 has bike rental!!

    Husband: Hot Damn! Bike Rental! Grab it for next year's vacation before someone snaps it up first! :roll:
     
  5. spinDrAtl

    spinDrAtl Beach Fanatic

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    Once again, Cynical Shelly misses the point while blasting 'The Sky is Falling' headlines. The article did not say cost was no object. The key word was predominate. Renters are comparing properties and those that are relatively close in price are being differentiated with added features. The vacationers that are spending 1500 per week, plus added expense of driving/flying, meals for a week, and any other attraction are going to choose properties based on those that most closely meet their lifestyle and needs, not whether one is 100 less per week.
     
  6. Underthebluemoon

    Underthebluemoon Beach Lover

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  7. spinDrAtl

    spinDrAtl Beach Fanatic

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    We normally require only a $200 deposit but do require full payment around 30 days in advance. The reason is that people think nothing of trying to cancel at the last minute when we have taken our unit off the market for them and possibly turned away other renters. Of course this policy does not apply to hurricane damage or evacuations. We strictly follow along with the area - in the event of mandatory evacuation, we fully refund the renter's money. If a hurricane comes prior to someone's rental period, then everything is a little subjective and must be assessed. If there is no beach access, such as last year when all beach walkovers were destroyed, then of course refunds are allowed. If there is access and the condition of the beach is in the eye of the beholder, we are always willing to negotiate a fair arrangement. Renters also need to protect themselves with trip insurance, if so desired.
     
  8. Underthebluemoon

    Underthebluemoon Beach Lover

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  9. yippie

    yippie Beach Fanatic

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    One of the major things that I have been told are the new rental policies of some of the larger rental agencies.

    For example, most are requiring people to take out trip insurance equal to 10% of the cost of the stay in case a hurricane or other problems exists. There are many agencies that no longer have hurricane policies. You must take out the rental insurance to get a refund.

    Secondly, many agencies have changed the way they charge credit cards. For example, ResortQuest charges 100% of the cost at the time of reservation. Others are charging 50% and the other 50% 3 week prior to arrival.

    And, of course, requiring the trip insurance for refunds of any kind.

    Now people are looking at a total of 20% over the weekly rates including the tourists tax and insurance.

    I think people are waiting longer to make the reservations for the above reasons.

    What do you think? If you were in that situation???
     
  10. spinDrAtl

    spinDrAtl Beach Fanatic

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    I knew that Resort Quest had changed their policy and was told that this was affecting bookings for the summer (obviously). However, the old policy was totally ridiculous for owners. Guests were allowed to cancel as late as the arrival date with no penalty. Owners would be left holding a prime summer week with no way to rent it. IMO, Resort Quest has gone too far the other direction at this point.
     
  11. SHELLY

    SHELLY SoWal Insider

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    MONEY (cost) is the predominate issue in the scenarios mentioned above--

    1) Not getting value for the money paid (should a hurricane mess up the beaches)

    2) Paying a chunk of money in advance (time value of money)

    3) Being "required" to pay additional money in the form of travel insurance

    4) The possibility of losing a sizable deposit in the event of a cancellation.

    I know the rules are in place to protect the owners investment--that's understandable, but "cost" IS a MAJOR factor that explains the reason for the "slowdown" in rental reservations. Other reasons (aside from the hurricane thing) are the increase in competition due to the building boom (as pointed out in the article); the fact that many folks who used to rent have bought their own condo/house; and some SoWal old-timers may be turned off by the over development in the area. After all of that, then I'd maybe put the availability of bicycle rental as a factor.
     
  12. spinDrAtl

    spinDrAtl Beach Fanatic

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    Again, you are spinning this to fit your viewpoint. First your reply was 'cost is no object?' which was not said in the article. Now you say that 'cost is a major factor'. To many, cost is no factor.

    The article mentioned many factors:

    "Busier schedules, uncertainty of vacation time and the advent of the Internet are causing people to schedule their vacations later.
    ?In today?s society, we?re more, ?What are we going to do tomorrow??? Titus said. ?It?s a lot more difficult for some people to schedule a year out.?
    In addition, Titus said increased availability of rental properties allow people to wait longer because they are not as concerned with securing a place. Cost is no longer the predominate factor. Renters have become increasingly concerned with ?added value,? like bike rentals, fitness centers, etc., Titus said.
    ?It?s a very competitive market,? Titus said. ?It?s a lot easier (for consumers) to make decisions.?
    Reports are also indicating that visitors are concerned about the shape of the beaches and the upcoming hurricane season.

    Like a true politician, you picked out one phrase, altered it a little, and used that to skew the information your way. Bike rentals are just an example of a larger class of added amenities that properties may use to sway a customer their way. It is true that the booking and cancellation policies are another factor that could sway some customers. Those who want easy cancellation can choose a hotel. None of these factors applies across the entire universe of renters as each has different priorities.
     
  13. DBOldford

    DBOldford Beach Fanatic

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    These are interesting observations. Our home was fully booked in the usual fashion since last summer. But we have consciously increased our rents by small amounts each year in order to keep our repeat renters from over the years, and also to offer good value for one of the larger homes. By contrast, we noticed that many homes have increased their rental rates by as much as 35 to 40 percent over last year's rates :eek: , which I assume was to help cover the increased costs associated with taxes, insurance rates, and utilities. Owners who expect rents to cover all their expenses need a reality check. For us, it is enough that rents greatly offset the home expenses (and we purchased five years ago). It's also helpful for the house to have people in it who are vigilant if something should go wrong so that the problem is detected early. These cost increases can become moot if an owner loses even one week to another more reasonably priced property during prime rental season. It's a good idea to consider the big picture, including how one's tax advantages offset "losses" in the bottom line financials.

    My sense is there are as many, if not more people going to the SoWal beaches as in the past, but that there is a hugely increased inventory of properties for them to choose from now. And some vacationers are now going to Escambia and Bay Counties, where they may find lower bed tax.

    For those vacationers concerned about the beaches, remember that there are beaches that were not adversely effected by the storms and which have totally renurished and do not require any dune walkovers. Look them up or inquire. And trip insurance is a good idea for a lot more reasons that hurricanes. Good idea to get some info on what is offered by these policies and work this small amount into your vacation costs regardless of where you are headed. We do this now for almost all trips. You wouldn't go "bare bones" on other types of insurance, would you?
     
  14. SHELLY

    SHELLY SoWal Insider

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    Donna,

    You bring up excellent points.

    Those owners who purchased properties before the BIG price run-ups are in and excellent position (albeit the insurance and taxes have gotta hurt). Recent buyers trying to cover their carrying costs are no match for long-time owners.

    The tax advantages are a bit tricky, depending on whether it is an "investment" property vs. a second home. On an investment property (if real estate isn't your primary business) one can only write off losses up to the amount of income they receive...so if losses exceed the income generated on the property, the tax advantage can be minimal...no?
     
  15. DBOldford

    DBOldford Beach Fanatic

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    Here's how this was explained to us by our CPA and tax attorneys: The ability to show a break even or profit condition is the difference between whether one can take the tax advantage now, as opposed to having it delayed until sale of the property (when the basis for gain is computed). Because we are still working some, we try to make that distinction now for our tax returns and can usually do so only because of when we purchased our property. It also has a very healthy rental history and a loyal following, thank goodness.

    An investment property is any property that one receives rental income on or which is rented more than 14 days out of any year, even if it is technically a second home (as ours is). Real estate doesn't have to be one's primary business. We have several rental properties that provide income, but that isn't our primary business or source of income. After the tax returns are done, those so-called "losses" (actually, differences in the bottom line accounting) are totally eclipsed by the tax advantages.

    One always prefers to finance a property as a second home, if possible, because the terms are better than those associated with a commercial property. FL banks allow this, which came as something of a pleasant surprise to us. There are also advantages related to insurance if the home is considered a second home.

    SoWal owners need to realize how amazingly fortunate they still are to offset their real estate investments to the degree they do with rentals. In many areas, the rental market is far more limited and even restricted for vacation rentals. And the management fees are 30 to 40 percent, on average, as compared to the more typical 20 percent at SoWal. In our CA community, it is illegal in all the cities and in the county to rent one's property for less than a 30-day period. And the bed taxes here are 12.5 percent.

    SoWal properties are still a very good investment opportunity for the person with realistic expectations and a long-term outlook towards appreciation. But real estate investment has never been for the faint of heart and generally, I feel that people should not buy properties they can't pay the debt on, with or without rentals. It's kinda like an anticipated inheritance...pleasant to contemplate, but you should make it part of your financial planning!
     
  16. SHELLY

    SHELLY SoWal Insider

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    Not surprising, since FL's Attorney General (who will be running for Gov) is pretty clueless on the housing laws.

    Crist's Home Sweet Homestead

    "Tax returns provided some of the information that allowed us to report Friday that Crist rents a high-rise Bayfront Tower condominium in St. Petersburg from a man who has taken the $25,000 tax break on the condo for three years, even though he doesn't live there.

    That's illegal for Crist's landlord, Lawrence Compton, who is in big trouble with the Pinellas County Property Appraiser's Office.

    Crist didn't know Compton has been taking the homestead exemption since 2003.

    Crist also said he didn't know it was wrong to do that (it's called "rental of homestead to constitute abandonment," Florida Statute 196.061)."


    More hi-jinx that puts the "duh" in Floriduh!
     
  17. TooFarTampa

    TooFarTampa SoWal Insider

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    Nice takes Donna.

    I think this is fairly localized. We found advantageous financing was much easier to obtain from banks and brokers in the Destin/PCB area than where we live. We found the banks and brokers here in Tampa were confounded by our purchase and consistently directed us to commercial lenders, who in turn did not want to lend to us for some reason or another. I don't think you can blame Charlie! though I suppose it would be fun to try. I would agree that he probably isn't detail oriented ... he did fail the bar exam the first try. :blink: Can't decide if I like Charlie! or not. He kind of confounds me. :floor:


    Yes.
     
  18. spinDrAtl

    spinDrAtl Beach Fanatic

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    Having a property classified as a 2nd home vs. taking a homestead exemption is apples and oranges.

    Regarding 2nd homes, as long as you meet the criteria for a 2nd home (such as being 50 miles or more from your primary residence and any other 2nd home) when you close on the property, you can later decide to classify that home as an investment property with respect to your tax returns.

    As Donna said, real estate does not have to be your primary business in order to realize various tax benefits on investment property.
     
  19. jhelms

    jhelms Beach Comber

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    Very good point. There is also an advantage to every trip that you make to the property. Certainly you do some sort of improvement or small fix to the property while you are there, so the trip (even if you view it as a vacation) can present a new list of deductions for you, mileage, supplies, etc.

    Also, some people miss the fact that you can finance more than one 'second home' at a time. Two ways to do this without committing mortgage fraud: generally most loan products will allow you to finance more than one home under 'second home guidelines' provided they are than 50 miles from each other and in vacation areas. OR, if you purchased a property as a second home a few years ago, but now you are going to purchase a better / nicer second home in the same area you may decide to keep the previous place as an investment property. A loan underwriter should understand that the new place will be your actual 2nd home now (and can still be rented out and shown on your taxes as an investment property). Since the first property was purchased and used for a period of time as a second home, no mortgage fraud or deceiving was done, yet you get to take advantage of the better terms for the life of both loans.

    Exactly!
     
  20. DBOldford

    DBOldford Beach Fanatic

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    I want to clarify that we do not qualify for the very advantageous homestead exemption in FL, since our primary residence is in CA. This is a big bonus relative to both property taxes and insurance rates. It is not a good thing for FL in general, however. Homestead exemption applies to any property of under $50K in value, which translates into most mobile homes (which typically rent space). Mobile homes constitute about one-half of the total residences in FL, which means that half the full-time residents are paying no or very limited property taxes. This is not a sustainable condition.

    In fact, there would be a considerable advantage to having a state other than CA our primary place of residence so that we don't have to pay the 9.4% state income tax that CA imposes. This applies not only to our income from all sources, but is also factored into the capital gains tax when a property is sold. So instead of the 15% Federal capital gains tax the Floridian pays, we get to pay 24.4%. :sosad: But not worth the hassle and the downside of flirting with the IRS, as it invites audits. Also, we like living in a blue state.

    Yes, one can count trips as a deduction, but a maximum of two per tax year. These are not bad problems to have, obviously.
     

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