From bust to boom: Alabama beach rentals fill up, but will the good times last?

Orange Beach condos

Rows of condos in Orange Beach, Alabama. (Joe Songer | jsonger@al.com).

Fourth of July travel to Alabama’s beaches are considered the high-water mark of tourism each year as families flock to the condos for vacations, fishing excursions, dolphin tours or simple relaxation somewhere along the state’s 32 miles of sugar-white sand beaches.

But in this COVID-19 world, Independence Day has come early. With strict “Stay at Home” orders lifted in Alabama – coupled with restrictions on short-term rental activity in nearby Florida – Alabama’s beaches are experiencing a record-breaking month heading into what is expected to be a record-breaking Memorial Day weekend.

“It’s nothing we’ve seen before,” said Brian Harris, broker/CEO with Harris Vacation Rentals.

Occupancy rates, which were well below 10% less than a month ago, are booming to above 90% for rental companies. Short-term leases, such as two-or three-day stays, are fueling the surge as cautious tourists step outside their home confinement and drive to the beaches for the soothing sounds of Gulf waters.

“We have been pleasantly surprised both at the number of visitors to our area and how quickly they have returned,” said Herb Malone, president and CEO with Gulf Shores & Orange Beach Tourism.

‘Massive upswing’

Alabama Opens Beaches Amid Coronavirus Pandemic

Alabama's beaches reopened on April 30, 2020, following a closure that began on March 20, 2020. The reopening has led to a massive upswing in occupancy rates for rental houses and condos in Gulf Shores and Orange Beach, Ala. (Christopher Harress | CHarress@al.com)

The industry in Alabama has seen a wild swing from late April to Memorial Day weekend. Here are there statistics:

-According to Gulf Shores & Orange Beach Tourism, the coastal area saw a jump from “less than 10% occupancy for vacation rentals” in late April to 32% by May 4. According to Harris, the area’s occupancy was at an astonishing low of 3% in April.

- Occupancies have since risen to 74% for the weekend of May 15-17, which is “higher than we normally see for this third weekend in May when Hangout Music Festival happens,” said Kay Maghan, spokeswoman with Gulf Shores & Orange Beach Tourism.

-Some rental agencies are reporting near full occupancy for this weekend. Harris is at around 90% occupancy for his rentals and Brett Robinson Rentals has eclipsed 96% for the weekend. Hunter Harrelson, who owns and operates Beachball Properties, a rental agency that manages approximately 109 properties on the coast, is at 100% occupancy. Liquid Life Rentals estimates it will host 1,700 families this May, up from 1,150 last year.

Further fueling the business boom in May has been the ban on short-term rentals in Florida, which was just recently lifted. Officials in Escambia County, Florida, and at Panama City Beach are not providing statistics on occupancy numbers yet for the month of May. But according to Harris, there is a noticeable difference between Escambia County – home to Pensacola Beach and Perdido Key – and Baldwin County in Alabama. While both counties dipped below 10% occupancy in April, they saw a resurgence with the opening of beaches on May 1. But the boom in Baldwin County was at around 68% earlier in the month, while Escambia County was at near 20%, Harris said.

“It’s a massive upswing for Alabama,” he said, projecting into June that Baldwin County was looking at higher occupancy numbers than Escambia County.

Lacee Rudd, a spokeswoman with Visit Panama City Beach, said the removal of the rental ban is paying off for the Florida Panhandle. “We have seen a spike in reservations, and I believe that our traditional holiday crowds will be in the destination this weekend. We’re hopeful this trend will continue through the summer.”

Kimberly Boyle, assistance professor of restaurant, hotel and meeting management at the University of Alabama, isn’t so sure the resurgence will continue. The coronavirus pandemic has led to more than 38 million jobless claims being filed in the U.S., and economists are predicting unemployment rates rivaling the peak unemployment periods of the Great Depression in the 1930s. With economic and public health uncertainty looming – officials are predicting a second wave of the virus to hit the U.S. later this year – vacations to beaches could be cut out of family budgets, Boyle said.

“Unfortunately, it looks to be a sluggish season in Alabama and for the hospitality industry due to limited incomes of families and the uncertainty of a second wave of the virus this fall,” she said. “When a recession hits, the hospitality industry is the first to be cut … because it’s a luxury, not a necessity.”

But Boyle, like officials with Gulf Shores & Orange Beach Tourism, points to a fact about Alabama’s beaches that could be beneficial for the region: It’s a popular “drive to” destination with a variety of price points accommodating families with differing income levels.

“If one family is used to staying at a four-star hotel/condo yet wants to cut back on expenses, they can still go to the beach, they’ll just stay at a lower priced property,” said Boyle. “For example, when the recession hit in 2008, the fine dining and casual style restaurants got hit the hardest financially, yet the quick service (fast food) restaurants’ numbers exploded. We still ate out; we just shifted our choices.”

Drive-to destination

Malone, at Gulf Shores & Orange Beach Tourism, said the out-of-state license plates he is already seeing around the region is indicative of the region’s easy access for drivers. The beaches are a popular go-to spot for travelers along Interstate 65 through Alabama, or along I-10. Statistics repeatedly show Alabama as a popular spot for travelers from Texas and Louisiana.

Of the nearly 6.9 million visitors to came to Baldwin County in 2019, almost all of them drove. According to Gulf Shores & Orange Beach Tourism data, a whopping 92% of visitors to drove to Orange Beach and Gulf Shores during the summers of 2018 and 2019. A meager 7% came by air, according the data, and three-quarters of them traveled through the Pensacola International Airport, presumably renting a car for the hour-long drive to the west.

“We are fortunate because we not only have beautiful beaches, but we are within a few hours to a two-day drive for a good portion of the United States,” said Malone.

The road-trippers will also be flocking the beaches this weekend to take advantage of the first weekend of the annual red snapper season. The season kicks off officially on Friday and has been described as the “Black Friday of the fishing industry” along Alabama’s Gulf Coast.

red snapper

Anglers pull up to Zeke's Landing Marina in Orange Beach, Ala. Recreational fishing for red snapper in Alabama state waters starts on Friday, May 22, 2020. (file photo)

Brant Frazier, a charter boat captain who owns and operates Fins & Family Fishing in Gulf Shores, said he’s almost completely booked for the next two weeks and is forced to “decline guests every day.”

He said that the month has already been “insanely busy” with families arriving to coastal Alabama earlier in the summer than normal because of school closures during the pandemic. He said in a typical May, his company does 50 inshore and offshore trips. This year, he’ll double that number.

“We lost significantly in March and April and I didn’t think there was a possibility for us to completely recover from the revenue we lost,” said Frazier. “But (the month of May) is beyond what I had hoped. While there is trepidation on what things can be, people are breathing a sigh of relief.”

Frazier’s charter boats are practicing social distancing by limiting the number of people on most of his boats to six people. He said that is the typical size of a family that lives together and visits the beaches.

Staying socially distant

Alabama Opens Beaches Amid Coronavirus Pandemic

Alabama's State Health Order requires people to remain 6 feet away from people on the state's beaches. So far, no tickets for violations of the health order have been written in Gulf Shores or Orange Beach, Ala. (Christopher Harress | CHarress@al.com)

Rental agencies are encouraging visitors to remain cautious and to practice social distancing. The revised State Health Order from earlier this month required people to remain at a distance of 6 feet from people of a difference household, and to limit any party size of no more than eight people at restaurants, bars, breweries and ice cream shops.

Studies have shown that coronavirus is less likely to spread outdoors than inside a building in which ventilation is limited. Health experts are expressing more assurances that the beach is a relatively safe place, but that a risk rises when large groups congregate at a bar, restaurant or inside a condo.

Baldwin County, itself, is not considered a COVID-19 problem spot. The county has had 269 confirmed cases of coronavirus since the pandemic began, and eight deaths related to the virus, according to state records. Only 2.8% of Baldwin County residents have received a COVID-19 test.

“It’s not beaches we are concerned about,” said Dr. Rachael Lee, assistant professor in the division of infectious diseases at the University of Alabama at Birmingham. “It’s everything else afterward -- the cookout where you get close to everyone, the bars and hotels where everyone is crammed into one small space. That’s where we are concerned about transmission.”

Harris, whose firm manages 120 properties – a majority which are single-family beach homes – said he’s worried about an inability for certain attractions to maintain safe social distancing as the flock of tourists return to the beaches. Condo towers, he said, could be attractions for large crowds.

Brett Robinson Rentals – which manages the Phoenix Condos in Gulf Shores and Orange Beach – has installed large signage that encourages visitors to restrict the number of people inside the elevators at one time. Elevators are restricted to a capacity of four people at one time, and for those four people to be part of the same traveling group, said Brett Robinson spokesman Robert Kennedy Jr. said. The messaging also encourages guests to wear face coverings in common areas, he said.

“We have found that folks, for the most park, are self-policing,” said Kennedy. “If you are seeing a bunch of folks getting into the elevator, folks are stepping out and waiting for another elevator. We have found that we do not have to intervene with security at this point.”

Beaches that drew large congregations in March, during Spring Break, remain closed. Alabama Point East in Orange Beach underneath the Perdido Pass Bridge remains closed, and there is no timetable for its reopening. Images of large congregations of youths underneath the bridge drew outrage online ahead of Alabama Gov. Kay Ivey’s March 20 order that closed the beaches for six weeks.

Orange Beach Mayor Tony Kennon said the May 15-17 weekend, “was one of the most peaceful weekends we’ve ever had” with people following guidelines. Authorities in Orange Beach and Gulf Shores have not issued a single ticket for violations of social distancing on the beaches even as thousands of people have required assistance from lifeguards and beach rangers. In Gulf Shores, lifeguards attended to 11,418 “preventative action” calls from May 1-20, involving actions taken by a lifeguard that “stopped a situation from becoming dangerous.”

“For the most part, people are staying away from others,” said Melvin Shepard, the head of Gulf Shores Beach Rescue. He said he’s more concerned about a large number of people attempting to swim in rough surf than he is with congregations on the beaches.

Help wanted

Rental agencies are looking to add more employees. At Brett Robinson Rentals, the company is looking to add “hundreds” of employees including housekeepers, according to Kennedy. The pay is around $25 an hour, he said.

The hospitality industry, which has been walloped during the coronavirus pandemic, has seen a dip of new unemployment insurance claims filed in the month of May. According to state records, 2,355 claims were filed in the week ending on May 16. For the week ending on March 28, there had been 17,632 claims filed by businesses in accommodations and food services.

Baldwin County has seen over 25,000 new unemployment claims since the week of March 14. But the 811 new claims filed on May 16 – representing the most recent data provided by the Alabama Department of Labor – is the lowest one-week total since the week ending on March 21. Alabama Gov. Kay Ivey’s order to close the state’s beaches was effective on March 20.

Lee Lawson, president & CEO with the Baldwin County Economic Development Alliance, said total amount of people who have filed unemployment claims represents approximately 25% of the county’s overall labor force. But he said that as the beaches have reopened, the overall unemployment situation in the county has improved.

“For the week of May 9, Baldwin County had 922 new claims, and we assume that more than 922 employees went back to work that week, which means we are most likely beyond peak unemployment for this event and should see a decline in May and June,” said Lawson.

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