HVS Miami | 8925 SW 148 th Street | Suite 216 | Miami, Florida 33176 www.hvs.com CLEARWATER BEACH THE VISION IS REALIZED OCTOBER 2013 Kristina D’Amico Associate
HVS Miami | 8925 SW 148th Street | Suite 216 | Miami, Florida 33176 www.hvs.com
CLEARWATER BEACH
THE VISION IS REALIZED
OCTOBER 2013
Kristina D’Amico Associate
CLEARWATER BEACH – THE VISION IS REALIZED | PAGE 2
Florida’s West Coast
The combined St. Pete/Clearwater Beach hotel
market area is located on the West Coast of Florida in
Pinellas County, just across the bay from Tampa. This
area offers 35 miles of white-sand beaches on 11
barrier islands across the Gulf of Mexico and is
anchored by Clearwater Beach to the North and St.
Pete Beach to the South.
Visitation
As a popular destination in Florida, the St.
Pete/Clearwater Beach area benefits from strong year-
round tourism, especially during the winter months and
strong weekend visitation during the summer months.
The wealth of natural attractions and recreational
attributes within this market area make the tourism
sector a strong force for the region. As shown in Figure
1, both domestic and international visitation have
steadily increased over the last 5 years with total
combined visitation (domestic and international) of 5.4
million in 2012. Both groups are projected to have
increased visitation levels in 2013.
FIGURE 1: DOMESTIC AND INTERNATIONAL VISITATION TO ST. PETE AND CLEARWATER BEACH
Source: Pinellas County CVB
The St. Pete/Clearwater Beach market is
heavily marketed to Midwesterners. Travelers
from the Midwest make up approximately 30%
of the visitors to the area with travelers from
the northeast being the second largest source
market. Tourism is dependent on these two
source markets as both markets comprise
nearly 60% of the total visitation to the area (or
nearly 3 million of the 5.4 million visitors in
2012). Interestingly, European visitors make up
the third largest source market, accounting for
approximately one million visitors per year.
FIGURE 2: ST.PETE AND CLEARWATER BEACH SOURCE MARKETS
Source: Pinellas County CVB and Research Data Services, Inc
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2008 2009 2010 2011 2012
# o
f V
isit
ors
Pe
r Y
ea
r ('
00
0s)
Domestic Visitors International Visitors
13%
7%
24%
31%
6%
19%Florida
Southeast
Northeast
Midwest
Canada
Europe
CLEARWATER BEACH – THE VISION IS REALIZED | PAGE 3
FIGURE 4: ADR, OCCUPANCY, AND REVPAR FOR ST. PETE/CLEARWATER BEACH
Source: Pinellas County CVB and Smith Travel Research
64%
65%
66%
67%
68%
69%
70%
71%
72%
73%
$50
$60
$70
$80
$90
$100
$110
$120
$130
2008 2009 2010 2011 2012 2013 F*
Occ
up
an
cy %
AD
R
ADR RevPAR Occ%
FIGURE 3: AVERAGE MONTHLY OCCUPANCIES FOR ST. PETE/CLEARWATER BEACH
Source: Smith Travel Research
45
55
65
75
85
95
Average Monthly Occupancy
The Macro Hotel Market
The combined St. Pete/Clearwater Beach market
currently has hotel products to fit the needs of all
travelers, ranging from small motels to full-service
upscale resorts, such as the Preferred Sandpearl and the
Hyatt Aqualea, both located on Clearwater Beach. There
are 94 hotels or 11,991 hotel rooms available in this
combined market area that report to Smith Travel
Research. Figure 4 below shows the occupancy, ADR,
and RevPAR for all hotels in the combined market over
the last 5 years. HVS projects this market to gain two
occupancy points to end 2013 at 72% with ADR at $119,
representing a 5.0% increase over the 2012 ADR.
Over the last 5 years, the average occupancy for this
market area was 72%. Monthly occupancy levels are
shown in Figure 3. The market area maintains the
strongest occupancies from 72% to 89% from February
through August, with top occupancies during March and
April, as the area is a popular destination for spring
break vacations from Midwest and northeast
vacationers.
Further examination of the monthly demand pattern
reveals that even the lowest demand months still
achieve occupancies within 68% of the annual average
occupancy, while peak demand months experience
occupancies 120% greater than the average. This
relatively strong year round demand pattern suggests
the existence of unaccommodated demand and argues
for the increases in the hotel room supply that are now
in the planning stages in this market area.
CLEARWATER BEACH – THE VISION IS REALIZED | PAGE 4
Clearwater Beach: The Redevelopment Plan
In 2001, Clearwater Beach created a strategic vision,
called “Beach by Design,” in order to foster the
redevelopment of new hotel stock on Clearwater Beach.
In our opinion, there were two key elements in the
“Beach by Design” Plan that contributed to its success:
Beach Walk and the creation of a Destination Resort
Density Pool.
Beach Walk
Approximately eight years ago, Clearwater Beach began
its redevelopment effort with the introduction of the
Beach Walk project. The objective of the Beach Walk
project was to revitalize the beach and to have the
beachfront become a more pedestrian centric focal point
for visitors. As such, the main thoroughfare was
realigned and a wide pedestrian walkway was created
adjacent to the sandy beach area. The pedestrian
walkway or “Beach Walk” runs for approximately a half
mile, beginning just south of the city Pier 60. Beach
Walk has created a more open, pedestrian friendly
beach experience that brings a high level of foot traffic
past the various hotels, shops, and restaurants within
Clearwater Beach. Given the relatively compact nature
of Clearwater Beach (approximately 4.5 miles long by
0.5 miles wide) and the pedestrian friendly aspects of
the Beach Walk project, most tourists are not dependent
on the use of a car during their stay, which is a
distinguishing factor relative to most other beach
destination markets on Florida’s West Coast.
The pedestrian friendly and pedestrian busy “vibe” has
become a defining characteristics of the town and has
made Clearwater Beach a sought after destination for
visitation and development. It is clear that the Beach
Walk redevelopment plan has significantly increased the
appeal of Clearwater Beach. Recent awards include the
following: Clearwater Beach was ranked in the Top 10 list
of Best Beaches in the United States by USATODAY in
2013, Conde Nast Traveler recognized Clearwater Beach
as the Best City Beach on the Gulf of Mexico, and the
Travel Channel has declared Clearwater Beach the Best
Activity Beach in the United States. Clearwater Beach
was also recognized in the Trip Advisor Traveler’s Choice
2013 Top 25 Beaches in the United States.
Hotel Density Pool
As part of the Beach by Design Plan, the city of
Clearwater Beach also created a Hotel Density Pool. This
“pool” was created to incentivize resort destination
hotel development allows hotel zoned parcels to exceed
their density permitted “as a right” under zoning by
applying for additional hotel development units from
the pool. Currently, the pool contains a total of 947 hotel
units still available for new hotel development. Several
recent hotel developments that have benefitted from the
hotel density pool included the Preferred Sandpearl
(2007), Hyatt Regency Aqualea (2010) and Pier House
60 (2012). Additional new development is in the
planning stages, where most of these planned hotels will
also avail themselves of the hotel density pool.
Over the last 20 years, Clearwater Beach has
transitioned from Gulf Coast Beach towns of “mom and
pop” independent motels and hotels to a beach town of
nearly all nationally recognized branded hotels. It is
clear that this transformation was the result of the
“Beach by Design” Plan.
Clearwater Beach Hotel Inventory: The Big 6
On Clearwater Beach, there are currently six hotels that
have more than 200 rooms. These hotels are all full-
service upper upscale to luxury hotels and include the
Hilton, Marriott, Sheraton, Preferred Sandpearl, Hyatt,
and Wyndham Garden. These six combined hotels total
1,732 rooms. The Sandpearl and Hyatt, some of the
newer hotels in the “Big 6,” comprise 28% of the “Big 6”
inventory. Figure 5 on the following page shows the
occupancy, ADR, and RevPAR over the last 5 years, as
well as HVS forecast for year end 2013 occupancy and
ADR, for this set of six hotels.
Most of the “Big 6” have reported over 50 fill nights per
year, with many other days running occupancy levels in
excess of 90%. Similar to the greater market area, and to
even a larger degree, the Clearwater Beach hotel market
metrics clearly indicate the presence of
unaccommodated room night demand.
CLEARWATER BEACH – THE VISION IS REALIZED | PAGE 5
FIGURE 5: “BIG 6” OCCUPANCY, ADR, AND REVPAR
Source: Smith Travel Research
The “Big 6” ADR has been making gains over the last 5
years along with strong increases in occupancy. RevPAR
has increased 22% between 2010 and 2012. HVS
projects that this competitive group of hotels will end
2013 with an average rate of $210 and an occupancy of
76%, reflecting a RevPAR increase of 11.7% from 2012.
Future Development Plans
Thanks to Beach Walk, the Hotel Density Pool, and
multiple recent awards, Clearwater Beach has become a
highly sought out destination for hotel developers. A
significant amount of new hotel projects, many of which
will make use the hotel density pool are currently in the
pipeline.
Figure 6 recaps hotel projects that are currently
proposed to be built on Clearwater Beach. Note: due to
the confidential nature of many of these projects, HVS is
unable to disclose their future brand affiliation and
developers.
FIGURE 6: PROPOSED NEW HOTEL SUPPLY PIPELINE
Proposed Property
Number of
Rooms
HVS Estimated
Opening Date
Courtyard by Marriott 134 Mid-2015
Hampton Inn & Suites 90 Mid-2015
650 Bay Esplanade 102 Mid-2015
Full Service Upper Upscale Resort 345 Mid-2016
Full Service Hotel on the Former Adams Marks Site 230 Mid-2016
Full Service Luxury Resort 200 Mid-2016
Total Proposed New Room Supply 1,101
Source: HVS Research, Clearwater Beach Planning and Zoning
Conclusion
Over the last 20 years, Clearwater Beach has made a
complete transformation from the traditional “mom and
pop” hotel products to a true nationally recognized hotel
market. The transformation began with the strategic
vision behind the “Beach by Design” Plan which invested
in physical infrastructure in the town and assisted
developers in achieving an economic model for
financially feasible new hotel development. The receipt
of multiple awards and the influx of national hotel
brands associated with the redevelopment efforts have
all contributed to the success of Clearwater Beach. The
new hotel supply entering the market within the next
three years is further evidence that the strategic vision
created for Clearwater Beach in 2001 will have been
completely realized in less than two decades.
64%
66%
68%
70%
72%
74%
76%
78%
$50
$70
$90
$110
$130
$150
$170
$190
$210
$230
2008 2009 2010 2011 2012 2013 F*
Occ
up
an
cy %
AD
R
ADR RevPAR Occ%
HVS Miami| 8925 SW 148th Street | Suite 216 | Miami, Florida 33176 www.hvs.com
HVS Miami provides a variety of consulting and
valuation services for hotels, mixed-use real estate, and
shared ownership projects. HVS Miami professionals have
completed over 1,300 engagements, of which 54% were
located throughout Florida. They have also worked in 28
Caribbean islands and 12 Central and South American
countries. In addition to certified valuations, the HVS Miami
office also provides feasibility studies, acquisition due
diligence, asset management, expert witness testimony, and
marketing and sales solutions for mixed-use and shared
ownership real estate developments.
About HVS
HVS is the world’s leading consulting and services
organization focused on the hotel, mixed-use, shared
ownership, gaming, and leisure industries. Established in
1980, the company performs 4500+ assignments each year
for hotel and real estate owners, operators, and developers
worldwide. HVS principals are regarded as the leading
experts in their respective regions of the globe. Through a
network of more than 30 offices and 450 professionals, HVS
provides an unparalleled range of complementary services
for the hospitality industry. www.hvs.com
Superior Results through Unrivalled Hospitality Intelligence. Everywhere.
About the Author
Kristina D’Amico is an Associate at HVS
Miami and works
in both the hotel
Consulting and
Valuation and
Shared Ownership
Services divisions.
Kristina graduated
from Florida
International
University with a
Bachelors of Business Administration in
Finance, Cum Laude, and a Minor in
Hospitality Studies before starting her
career at HVS. She is a Registered Trainee
Appraiser in the State of Florida and is
diligently working towards her education
and experience requirements to become a
Certified General Appraiser. Kristina has
completed hotel and shared ownership
appraisals, market studies, feasibility
studies, purchase price allocations, and
ad-valorem tax valuations in the United
States, Canada, the Caribbean Basin and
South America. She specializes in assets
on the West Coast of Florida.
To Contact Kristina:
Phone: +1 (305) 378-0404 x 1016
Email: [email protected]