Does the recent drop in Dare County meals and occupancy dollars signal a real trend?

By on April 2, 2024

(outerbanks.org)

While recent news from the Outer Banks Visitors Bureau that January 2024 occupancy and meal collections for Dare County dropped significantly from the January 2023 numbers (down 52% and 26%, respectively), it raises the question of whether this suggests some significant reversal of the COVID-driven visitor boom.

Examining collection revenues for the last decade—from 2014-2023—there was a steady and modest rise in those revenues from 2014 until 2020. With the exception of the 2020 meals dollars, after that, the pandemic sparked a major spike in local tourism—triggering a new peak level of visitors and revenues.

Looking over the decade, occupancy collections stood at about $414 million in 2014. In 2023, that number virtually doubled to $826 million. On the meals side, the $225 million in 2014 collections ballooned to $389 million in 2023, a 73% increase.

These gains far outpace inflation, which grew at about 31% in total from 2014-2024, with an annual average rate of about 2.74%, according to data from the U.S. Bureau of Labor Statistics.

From 2014 until 2020, the annual numbers increased in a relatively narrow range from 3.6% to 5.8%. In the same period, the meals collections growth vacillated a little more, ranging from .1% to 8.1%.

One big difference in the two sectors emerged in 2020. That was the year Dare County prohibited visitors and non-resident property owners in March due to COVID, and then re-opened the doors two months later. For all of 2020, Dare County occupancy revenues jumped 11% from the previous year. In the same year, however, meals dollars fell by a significant 16.3%.

According to Executive Director of the Outer Banks Visitors Bureau Lee Nettles, the downturn in meals money that year can be attributed to the COVID-related “restrictions restaurants faced on capacity limits, which persisted and fluctuated for quite a while following re-opening. Lodging didn’t have that. In fact, the rental homes were kind of perfect for that touch-free world.”

He also mentioned that “staffing shortages caused restaurants to pull back on hours and days of operation.”

Regardless of the divergence in 2020, both occupancy and meals exploded in the second pandemic year of 2021. Occupancy numbers jumped 34% from the previous year, up to $771 million. The meals side also saw a huge increase over the previous year—up 51% to $352 million.

From that point, the annual percentage increases reverted back to their more modest levels—albeit working off really big numbers. Occupancy rose 5.6% in 2022 and marginally, by 1.4%, in 2023 to the $826 million annual level. Meals rose by 5.8% and 4.4%, to reach the $389 million mark.

In assessing the steep drop in collections from January 2023 to January 2024, Nettles said it portended a “soft” spring and that “the numbers are cooling off.”

But whether those January 2024 numbers really foreshadow a year that not only slows, but actually reverses the recent visitor explosion remains to be seen. As far as Nettles is concerned, “the return to a more sustainable level of visitation is a good thing for all concerned.”

 



Comments

  • Allen

    I would bet it would lean more towards the outrageous rental price explosion over last year that I keep reading about on FB forums where people have noted they have stopped coming here because of rental price increases. Jack up the prices, people learn to stop coming and if they stop coming, they stop spending on meals. Of it they do come, and pay the higher prices, they spend less on inflated dining-out food prices. Inflation has consequences. Imagine that.

    Tuesday, Apr 2 @ 10:22 am
  • snoopy

    I would think rental management companies would have a handle on the early reservations for the coming season and whether rates will have to be adjusted. Data on vrbo’s and AirBnb’s projected rentals can also be garnered. Many investors who bought at inflated(?) prices during the covid frenzy projected certain occupancy rates. If those projections are no longer valid will we see properties go into foreclosure or be sold because the incomes projected in their model can no longer be counted on?
    All and all a return the the pre-covid years would be more sustainable for year rounders and their employees. We were spoiled by the covid spurred visitors but the “damage” to our real estate industry remains, little affordable rentals for employees. We will see in the coming months.

    Tuesday, Apr 2 @ 12:19 pm
  • E. Tompkins

    One thing that could be driving tourism down is the increase in rental costs. We’ve rented for a week in OBX several times with a group of friends, but this year that’s not happening due to the high cost of property rentals. One home(semi-oceanfront) we enjoyed renting has raised their rates by 20%, making it prohibitive to our budget. Sadly, this means that my family will only be visiting for one week,for certain, as opposed to our normal certain two weeks.
    We love visiting, and hate having to reduce the time we spend in the Outer Banks, but it’s simply growing too expensive.

    Tuesday, Apr 2 @ 1:43 pm
  • Obxserver

    Occupancy rose 5.6% in 2022 and marginally, by 1.4%, in 2023 . Couple of things to consider.
    1. The increase in beds available (new construction. Every treehouse and garage in town becoming an air bnb. More people paying rents means more tax dollars.
    2. Rate increases: Folks paying more for the same place means more tax dollars. Starting in 2021 there were some major rate increases.

    Looking at those figures it looks like visitation counted by heads in beds may have actually decreased in 2022 and 2023 and the decrease was more or less disguised by the increase in rates and beds.

    I imagine anyone driving up and down the by-pass is going to have a hard time believing that. Especially after this weekend. Maybe a lot of the traffic is generated by an increase in year ’round residential population. Be good to get some reliable information on that trend. Maybe including Hyde, Tyrrell, Camden and Currituck south of Barco/158 for the last 2 or maybe south of Grandy. Those outlying areas could be contributing a lot of workforce traffic. How ’bout it Mark? Be another good story.

    Tuesday, Apr 2 @ 4:29 pm
  • Just the weather

    The average Occupancy Collections were not down for the last 6 months of 2023. A couple little ups and down but basically they were up. January 2024 was down by half but January is not a normal rental month.

    January is not a month when people book a rental house months in advance. January is a month when it is freezing cold with snow up north and 50s on the Outer Banks people say let’s get out of here and go to the beach for a week. This year it was more moderate than normal up north and colder and wetter than normal here.

    The reason the Meals Collections were not off as much as the Occupancy Collections is because the off season is the time of year when locals can actually get into a restaurant without waiting an hour. Less visitors were eating in our restaurants but the locals made up some of the difference.

    Tuesday, Apr 2 @ 6:39 pm
  • Kitty Hawker

    Or maybe visitors are disenchanted with this new version of the Outer Banks that has “developed”.

    Tuesday, Apr 2 @ 7:04 pm
  • William Harrison

    The restaurants have got to open up for business before they can show sales. I’ve never seen so many close like they have the past couple years.

    Tuesday, Apr 2 @ 9:06 pm
  • jeremy

    Maybe just build another sugar shack…that’ll bring em in

    Wednesday, Apr 3 @ 2:57 am
  • Mark Jurkowitz | Outer Banks Voice

    Do you mean Sugar Planet?

    Wednesday, Apr 3 @ 8:48 am
  • Lisa

    I’ve been visiting the Outer Banks from Maryland since 2005. I normally visit anywhere from 4 to 8 times a year, every year, even during the pandemic (once it reopened). I stay at hotels and eat out during my visits. I can tell you that hotel prices increased considerably at my favorite hotel (won’t mention the name) after the pandemic and never went down. I always assumed the high price was to recover what they lost when OBX closed, but then the prices never came back down. As a result, I’m coming less and staying for shorter periods. As for food, there has been a noticeable decrease in the quality of the restaurant/fast food experience. Long drive-thru lines still happen at certain fast food joints even in 2023 – like a half hour to get to the window. You get to the window and they’re out of main items on the menu. The service is poor and the food feels of a lower quality than on the mainland even at chain restaurants. One of my favorite restaurants started charging high service fees for takeout after the pandemic that were ridiculously high and punished anyone who wanted to use their takeout window. I stopped going to the restaurant. In fact, in my trips in 2023, I started going to Food Lion and buying my own food because the restaurant experience had become so poor. I even started wondering if there were other beachfront regions I should check out that might be better than OBX. I love OBX more than any other beachfront area my family has visited during my lifetime, but the quality has definitely changed. Maybe that should be the focus of a future study.

    Wednesday, Apr 3 @ 6:42 am
  • RicknKDH

    Now that things have started to cool off, enough with the silly issue of “affordable or workplace” housing.

    Wednesday, Apr 3 @ 7:10 am
  • Glenn

    In the past couple of years, many of our family friends & relatives have opted to bypass the OBX and have headed further south to Charleston, Savannah, St. Augustine, Sarasota, Ft. Myers…etc. My wife & I are strong supporters of local restaurants but, in our humble opinion, the overall dining experiences (with a few exceptions) has declined immensely in the past few years. Seeing new candy stores being built throughout the area only contributes to the declining image many now have of our beautiful area.

    Wednesday, Apr 3 @ 7:18 am
  • Greg c

    Historically, at least since 1979 when I moved here, occupancy on the outer Banks has always fallen during the time when the economy is booming. People can afford plane tickets and they go other places. We have always done great during recessions and when the economy is not functioning so well and we are a tank full of gas drive away from millions of people.

    Wednesday, Apr 3 @ 12:13 pm
  • surf123

    The occupancy and meals tax revenue cannot be accurately used to determine much of anything especially given how fast and high rents and food costs have moved. It’s so much that revenue could increase significantly with occupancy and meals decreasing. The only accurate way to gauge the revenue is to know what the number of the revenue and count of every home or hotel and number of meals eaten and their costs. Those numbers are not easy to get to so looking at overall revenue really means nothing. It would be like taking a companies gross revenues and trying to calculate profit without knowing the cost structure. Hopefully if there is a slowdown it will continue. The annual beach vacation at the same location is a squandering of valuable vacation. If someone thinks this is the best place to vacation they need to do some Googling or get a travel guide to the US or world. Even if you shoehorn yourself into only taking beach vacations you need to tryout other East Coast beaches (Maine and Massachusetts are two), or venture out to California. So many more places to visit in the US and around the world (including beaches).

    Wednesday, Apr 3 @ 2:34 pm
  • Mark Jurkowitz | Outer Banks Voice

    Surf, would take issue with your idea that revenue calculations mean “nothing.” Yes, they don’t correlate exactly with the number of visitors, but with this kind of increase, they offer some pretty decent clues.

    Wednesday, Apr 3 @ 4:44 pm
  • Charles

    They just opened the new Sugar Planet in Avon. Folks are flocking in by the dozens and I just got my laundry done there.

    I will be opening a dentist office next door in May. Ka-Ching !!

    Wednesday, Apr 3 @ 3:20 pm
  • Charles

    the reality on HI is all restaurants have taken a hit and are burned out earlier every year.

    Closed several days a week and now only open for dinner makes the lines even longer, and the food is not worth the price.

    You can actually hear the groans when a table of 12 shows up.

    $8 beers as a kicker ? No thanks..

    Wednesday, Apr 3 @ 3:25 pm
  • William Goodwin

    Rental increases have also limited our time of visiting. Harder to afford two
    weeks twice a year. Been visiting since 1986, not sure how long we can continue doing that.

    Thursday, Apr 4 @ 9:03 am
  • Charles

    We have been coming to OBX for the last 22 years. It is not he warm cozy family area it used to be. We’ve tried the AirB&B route and with the surcharges, cleaning fees and subpar bedding, we would rather stay at a nice hotel. Over the holidays we rented a home for family members to come, we bought all our groceries and cooked in most meals. Restaurant prices and quality are simply out of touch. Who wants to pay $3 for a bagel at the local hotspot that are not even made on premises but come in frozen from out of state? Our plans were to bring a thirty year family business to the area in 2024 and have now reconsidered. The fake pandemic is over. The gouging cannot go on. NAR claims NC real estate prices are over valued 39% and will fall to pre-covid levels or below. Perhaps then things will go back to the way they were.

    Thursday, Apr 4 @ 10:12 am
  • 102

    I’ve been here for almost 40 years. I’ve watched prices go up and up. One of the 7 deadly sins is “GREED”, it now runs this place. $4 or $5 a draft isn’t considered outrageous for a domestic beer and most of the pint glasses on hold 12 ounces. $8 or $10 for a mixed drink in a tall glass with a lot of soda or juice and a 1 ounce shot, can’t even taste the alcohol. Lunch specials that start a $12. And we the consumers are expected to tip well and cover the hourly cost of the hired help. A waitress still only gets $2.31 and hour, most bartenders get between $5 and $7 an hour. We are expected to tip so they can make a living. Think about it folks the owners are making bank and the help relies on us to pay the good tip. I have always tried to pay people that worked for me a good wage, and most of my past employees were even helped by me to start there own businesses. Greed rules the ” Tourist driven industries”

    Friday, Apr 5 @ 5:48 pm
  • Greg

    As I read many of the comments above I will say that they are mostly just inaccurate. We have many hardworking people on The Outer Banks who provide excellent service to the visitors in accommodation and dining on all levels of cost. The capacity to accommodate visitors has grown, however that is confined to a certain area. The density of the commercially developed area here is not even close to the density of other Beach destinations on the Southern East and Gulf Coast. Notice in the most critical and whining comments above that no one mentions the huge amount of natural undeveloped land there is in Dare County. This amount of undeveloped land is unparalleled on The East Coast. I have traveled this Coast from Virginia Beach to Key West and The Outer Banks is one of the best beach destinations and a place to live there is. There will always be the chronic complainers, pay them no mind as they see little good anywhere they go.

    Saturday, Apr 6 @ 9:36 am
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