Visitors helped area through recession, but local consumers remain cautious
It seems that hardly a week goes by without a new survey or report hinting at the state of the U.S. economy, but to see what’s going on locally, municipal budgets can be a trove of information.
Budget data from North Charleston, which is the region’s retail and industrial hub, shows how visitors to the greater Charleston area helped prop up the economy during the recession.
The city’s sales tax collections, which have implications well beyond the city boundaries, show that consumers slashed their annual spending on taxable items during the recession by more than $100 million, a more than 11 percent drop in sales from mid-2007 to mid-2010. Sales have been climbing for two years now, but remain well below pre-recession levels.
In contrast, spending on meals, drinks and hotel rooms in South Carolina’s third- largest city hardly dipped during the recession, falling by less than half of 1 percent, and then climbed to new highs between 2010 and 2011.
“That’s certainly true for me,” said Casey Glowacki, who operates the restaurants Five Loaves Cafe and Sesame Burgers and Beer, with five locations in the greater Charleston area.
He said a Sesame location in North Charleston’s Park Circle area has been the best performer, but locations in West Ashley and downtown Charleston also have done well.
“It seems like everybody in Park Circle is doing well,” he said.
Andrea Parco, of the nine- restaurant Dine With Sal group, said business did fall off during the recession but has been picking up at the restaurants, which include Mustard Seed, Boulevard Diner, Sette, Long Point Grill, Uno Mas and Village Bakery, most of which are in Mount Pleasant.
“Now, it seems like people are splurging more,” she said. “You can tell, when people are ordering more wine, or a specialty cake.”
Glowacki said his locations in Mount Pleasant haven’t been as busy as others, perhaps because out-of-town visitors don’t seek out restaurants there.
New hotels have been rising in North Charleston, adding hundreds of rooms to the area, at prices generally more affordable than in downtown Charleston.
For the first time, taxes on restaurant and hotel spending exceeded revenue from the municipal 1 percent sales tax.
Meanwhile, spending at restaurants and hotels hit record highs during the past year, North Charleston tax records show — not due to rate increases but because there’s been more hospitality-related spending to tax.
“I think it has been proven that the hospitality industry is pretty resilient,” said Dan Blumenstock, who oversees three North Charleston hotels for Fennell Holdings’ Lowcountry Hotel Group. “I think we weathered it fairly well.”
Tourism has been important, Blumenstock said, but business and convention travel, as well as military-related travel, have played a key role in rising accommodations spending.
“I think one thing we did that was very smart was, we did not sit back and whine about (the recession), but got even more aggressive with our marketing,” he said, referring to efforts by the Charleston Area Convention and Visitors Bureau.
“Our conventions book years in advance, so some of the conventions were still coming, even though it was a recessionary time,” Blumenstock said. “They may be coming to our hotels for a convention but also treating it as a vacation, and that helps everybody.”
Brumby McLeod, a faculty members at the College of Charleston’s Department of Hospitality & Tourism Management, said some of the strength of the restaurant and hotel sector can be attributed to Charleston being a top travel destination. Readers of Conde Nast Traveler have named Charleston the top tourist destination in the U.S. for two years in a row, and this year declared Charleston the top travel city on the planet.
Blumenstock said Charleston’s status as a destination benefits the hospitality business across the region.
“For the population coming into town, we are all one big area,” he said.
Reach David Slade at 937-5552 or Twitter @DSladeNews.