Northwest Florida Beaches International Aiport Takes Flight

After more than a decade of planning, Panama City’s new international airport has seen friendly skies in its first months of operation. And its success is giving area businesses hope that their economic slump may soon be over.

Taking Flight Northwest Florida residents are hoping a new international airport near Panama City can help counteract the effects of the Gulf oil spill and a tough economy By Zandra Wolfgram Originally published in the Oct/Nov 2010 issue of 850 Magazine

After more than a decade of planning, Panama City’s new international airport has seen friendly skies in its first months of operation. And its success is giving area businesses hope that their economic slump may soon be over.

With the help of 36 daily flights, passenger numbers at Northwest Florida Beaches International Airport have far exceeded expectations: The summer’s traffic was three times what the old Panama City-Bay County International Airport saw last year.

A big reason for the uptick is Southwest Airlines, which is offering flights on Boeing 737s from the new airport to Nashville, Tenn.; Baltimore-Washington, D.C.; Houston; and Orlando. Airport officials also report that Delta’s passenger traffic at the new facility, which opened May 23, is up 20 percent over 2009, and that two of that airline’s daily flights are via comfortable MD-88 jet airliners. In June, the first full month of operation, airport traffic rose to 83,181 passengers, compared to 28,268 for the same month last year at the old airport.

Randy Curtis, executive director of Northwest Florida Beaches airport, said the actual numbers exceeded all of their expectations. “We ran several scenarios of forecasting passenger traffic and we went with a conservative increase of

3 percent. For June alone, the traffic jumped to 194 percent over last year,” he said. Though the projections were set before Southwest committed to coming into the market, Curtis said Southwest’s presence goes beyond passenger quotas.

“Southwest’s arrival resulted in major competition and airfare reductions,” he said. Curtis also indicated that all of the new destination markets were performing well, but that traffic in and out of Chicago, which stops in Nashville before continuing on to Chicago, appeared to “really surprise everybody.”

Despite threats to the area’s pristine beaches from the Deepwater Horizon oil disaster, many local businesses say the new airport has already become a catalyst for economic development in the region.

But Daniel Petree, dean of Embry-Riddle Aeronautical University’s College of Business, warned that the increase may be short-lived. While Northwest Florida’s tourism industry took a big hit after the massive oil spill, the cleanup effort produced a sharp increase in travelers because of the news media, BP workers and government officials flocking to the coast.

“The Panhandle has been unusually busy,” Petree said. “That’s a blip that would have to come out of the data before you could begin to see if projected traffic for that airport holds up.”

What does hold up, according to Mark A. Bonn, professor and director of the Dedman School of Hospitality at Florida State University, is the brand loyalty of the destination’s drive market. He predicts it will be this segment of visitors rather than fly-in guests that will be the first to shore up tourism.

“Having witnessed two oil spills while living in Texas in the 1980s, I can attest to the fact that tourism was slow to recover and the visible appearance of oil on the beaches deterred beach visitors. As long as no oil appears on our Florida beaches, I would expect the Northwest Florida drive market to be more resilient given their long history of patronizing this region. As with any disaster, perception becomes most important to manage. Word of mouth and testimonials work the best in these situations because the general public places much more value in these sources than with other types of media. If the region can develop strategies that will adopt these tactics, the 2011 summer season should come back to at least levels seen in 2008–2009,” said Bonn.

Most area residents and business leaders are optimistic that the new airport will burnish Northwest Florida’s reputation as one of the premier vacation destinations in the Southeast.

With 14 million annual visitors equating to $3.9 billion in sales tax revenue from restaurants, shops, water sport outfits and thousands of resort, hotel and beach cottage rental accommodations along the Emerald Coast, the potential upside for the tourism industry is significant.

As the area’s largest vacation rental company with nearly 3,000 accommodations along the coastline, ResortQuest has experienced firsthand what increased air service could mean for the region. However, general manager Lino Maldonado insists that it’s not just about lowered fares and increased capacity.

“We’re seeing the first of many changes of quality of air service in the region,” he said. “As a company that spans the entire region, to see the area go from small and regional to offering international air service, it is very exciting.”

With 65,000 square feet of meeting space, Sandestin Golf and Beach Resort is one of the largest convention resorts on the Emerald Coast. Approximately 60 percent of its room nights are booked annually by corporate and association groups holding meetings and conventions. John Russell, senior vice president of operations for the resort, said the new airport has enabled Sandestin’s sales team to increase its efforts in new target markets, such as Baltimore and Washington.

Russell gives the airport sole credit for attracting some of the resort’s new clientele, including 4,540 room night bookings already slated through 2013.

“It absolutely has had a positive impact,” he said. “We contracted a major piece of business in Nashville that would not have come without that airport.”

Paul Wohlford is vice president of sales and marketing for The Resort Collection, which operates nearly 50,000 square feet of vacation rental space. He agreed that the airport has already had a major economic effect.

“The new airport has tripled the traffic into and through the Panama City Beach area with the additional flights,” he said. “We have booked several groups in the fall that had accessibility challenges in the past but can now get here on direct flights.”

About a month before the Northwest Florida Beaches International Airport opened with much fanfare, the oil spill occurred. Many businesses along the pristine beaches of Northwest Florida feel that the disaster has muddied the waters of the airport’s true economic impact. Nicole Scott of Have Travel Memories travel agency in Fort Walton Beach said that any upside her business may have enjoyed has been dampened by the spill.

“It really has overshadowed the new airport, which is really sad,” she said.

Marketing director Traci Stokes said cash registers have been ringing at Destin’s Silver Sands Factory Stores, the largest name-brand designer outlet on the Emerald Coast. But while the airport could be a factor, she said its direct economic impact hasn’t yet been measured. Still, Silver Sands is looking forward to the promise of new shoppers — a bonus Stokes says the entire coast can cash in on.

“The increased level of accessibility to our market that the new airport offers is certainly a benefit to all area businesses,” she said. “It provides our loyal, repeat visitors with a convenient new way to visit us and opens up the doors to many new visitors from across the country and the world.”

Laurie Olshefski, the owner of Shimmering Seas Jewelry & Gifts, located in both Seaside and Pier Park, said that since the opening of the new airport, she has heard positive comments about the facility and the ease of traveling. She ventured that visitors “plan on coming back more frequently, which to me means more tourist dollars to be spent in our area.”

Jim Musicaro, owner of Carrabba’s Italian Grill in Panama City Beach, said he has been happy to see some of those tourist dollars and new faces already.

“I have seen many parties stop at my restaurant after picking people up at the airport,” he said. “I’ve also had many other people say that they flew in from places like Boston, New York and various other places that seem new to me.”

Dave Trep, owner of Firefly restaurant in Panama City Beach, said he has also seen a little extra business from passengers arriving from the new cities served by Southwest, as well as some of the flight crews.

“It’s been nice to have guests in from larger cities who are used to having fine dining choices and appreciate what we are doing at Firefly,” he said.

Mike Bennett, managing partner for The Towne of Seahaven, didn’t wait for the visitors to come to Panama City Beach. In May, he took a trip aboard Southwest to Houston with a few other business and tourist leaders to promote the new service.

“I questioned several boarding customers whether it was a first-time visit for them to the Florida Panhandle, and about 40 percent said yes,” Bennett said. “So even with two difficult issues surrounding our business — a weak economy and the oil threat — I believe the Southwest edge is lessening those threats and boosting business, especially in the longer run.”

Meanwhile, in what might be one of the best business outcomes, the closest competitive airport to Northwest Florida Beaches International Airport has not seen reduced passenger traffic. Michael Stenson of Northwest Florida Regional Airport, located in Valparaiso, said his airport is holding its own. Bucking a national trend of decreased air travel, and despite a downturn in the economy and tourism due to the oil spill, Stenson said the Valparaiso airport is doing “pretty good” to remain even with last year. He said that in May, Delta Airlines increased seats at Northwest Florida Regional Airport by 10 percent over last year and continues to grow. And American Eagle, with direct service to Dallas, was running at 90 percent of capacity.

“We never really lost passengers to Panama City because we’ve had better fares and other airlines,” Stenson said.

With a 30-year lease from Eglin Air Force Base, Northwest Florida Regional Airport plans to keep its focus on the military and defense contractors, as well as marketing to the 6,000 newcomers associated with the F-35 Joint Strike Fighter aircraft that will be stationed in the area.

“We will continue to be aggressive with existing new service and look to expand to new destinations,” Stenson said.

The News Service of Florida contributed to this report