Tax reports from the TDC (Tourist Development Council) showed a 40% decrease in March tax revenue for 2016 compared to the prior year. Hotels and rental management companies are forecasting even lighter spring break traffic this year. What was previously considered a peak rental month is now another quiet rental month for many condo owners in Panama City Beach.
This is a very touchy issue in Panama City Beach. I just thought it would be helpful to present the data for condo owners.
New Spring Break Rules Did Impact Rental Revenue in March
2016 was the first year Panama City Beach eliminated drinking on the sandy beach. This new rule may be to blame for the 40% decrease in rentals in 2016. 2017 spring break bookings are looking to be substantially lower than 2016.
Other Months Made Up for the Dismal Income in March
2016 rental revenue was only slightly less than 2015. This was due to the fact that higher income in other months made up for the dismal March numbers.
Not all Condominiums Were Affected in the Same Way
I took a look at a number of individual Panama City Beach condominium units and floor plans in several buildings to try and provide an objective opinion of how the new rules were affecting condominium owners. The results were not as drastic as I expected.
Long Beach 1 Bedroom Condos
Long Beach did see a decrease in rentals during March 2016. The individual condo I chose had gross rentals of $2,315 in 2015 and $1,997 in 2016. This is a 14% decrease in rentals.
I was told by another Long Beach one bedroom owner who said here March 2016 rentals were much lower and did not see any bookings for March 2017, but I was not able to verify this with rental statements.
Calypso 2 Bedroom + Bunk
The individual condo I picked here had $2,977 gross rentals in 2014, $2,532 in 2015, and $2,632 in 2016. So 2016 actually saw a 4% increase in March Spring Break rentals. Previously, calypso never received a significant amount of college spring break rental clientele. It is one of the buildings that appear to be immune to the crack down on college spring breakers.
Areas Seeing Rentals Go Through the Floor
The Summit condominium
The Summit condominium, one of the most popular spots for spring breakers, is seeing a huge decline in rental revenue. This condominium was built in 1984 and sits right next to Spinnaker and Club LaVela.
Owners who rent condos themselves
Owners who handle condo rentals themselves have always been able to generate annual rental numbers that put rental management companies to shame. I know of several 2 bedroom condominiums in a non-resort building where a good rental company does 22k gross rentals per year; whereas individual owners renting themselves do 36-38k annually. Although these owners obligate themselves to a part time job renting their condos, many do pull in impressive numbers. These are the owners who were most negatively affected when the no drinking on the sandy beaches rule passed. Prior to this rule, March was another peak season month where they would see 3-5k in rentals. This March many condos are empty.
Do Panama City Beach Condo Owners Want To Host College Spring Breakers?
This is a fair question to ask. Different condominium building owners probably have different answers to the same question. The college spring break crowd is, well, college students. It is no surprise they are going to be loud. Hosting them is sonomous with college parties in front of Spinnaker, LaVela, Shores of Panama, Holliday Inn, Sharkys, and Sandpiper. Condominium staff will be required to spend more on security and cleanup efforts. Since news outlets like to sell advertising and report salacious stories, Panama City Beach faces the likelyhood of bad press coverage. It is fair to question. Does the extra revenue is worth the potential pitfalls?
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