Industry projections for the summer tourist season include some uncertainty

From OuterBanksVoice.com

With the explosive growth in visitation and revenue during the COVID years in the rearview mirror, the upcoming Outer Banks summer season offers “a mixed bag and it’s changing daily,” Lee Nettles, Executive Director of the Outer Banks Visitors Bureau (OBVB) told the Voice.

“It’s a moving target, especially in light of tariff talks and the potential cuts to federal employees, which would have an impact on one of our largest feeder markets, the DC area,” Nettles explained. “On the other hand, economic concerns can be an unexpected benefit if people start changing their travel plans from cruises and European trips to drive-to vacations. So, it’s a mixed bag.”

Although predicting what will happen during the peak Outer Banks summer season may be a moving target, the consensus among industry leaders interviewed by the Voice is that three months period beginning from June through August would be flat—and may even be down a little compared to 2024.

“I think that we’re going to have a fairly solid summer. We’ll probably see a slight dip from the revenue collections from last year and the number of reservations we have, but I think overall, it’s going to feel like a pretty normal summer,” said Monica Thibodeau, Carolina Designs Managing Director.

Tonia Cohen, General Manager of the Ramada Plaza in Kill Devil Hills, said much the same thing. She is also on the OBVB board as the representative for the hotel and motel industry.

“For the most part, they’re [hotels and motels] seeing a flat year for their properties, and even maybe a little bit of a decline compared to last year as well,” she said.

If there is some uncertainty predicting what will happen this summer, there was universal agreement that the 57.2% growth in occupancy collections in Dare County seen between 2019 and 2022—which marked the years COVID influenced visitation—was unsustainable and it’s unrealistic to expect that level of occupancy and growth.

“We won’t see the numbers that we hit [during COVID] but we didn’t see those last year either,” Thibodeau said. “But then when you compare it to 2019, we’re way up.”

The OBVB occupancy statistics bear her out. Through 2024—a year in which occupancy dollars actually dropped by 5%–overall occupancy collections are up 51.8% over 2019.

There are a number of caveats in predicting how what will happen during the summer. Cohen, in particular, points out that hotel and motel bookings, even in the summer, can be weather dependent.

“Two years ago, I think it was July, was absolutely horrific. It was rain, rain, rain,” she said. “One of the worst I’ve ever seen in this business. But last year, it wasn’t as bad…People were still coming down. It’s just going to be weather dependent for the most part.”

In talking about how weather can influence her hotel’s occupancy, Cohen touches on the Outer Banks as a drive-to destination and how that influences her business.

“You get people coming down from Virginia really close by, they’ll just drive in for the weekend,” she said.

“The drive-to helps…It makes us resilient,” Thibodeau agreed. “For folks who might otherwise want to go on a longer trip,” the Outer Banks is an option.

Although occupancy, which is based on the amount of occupancy tax collected in Dare County, and the number of people visiting the Outer Banka are roughly the same, more visitors do not always mean more revenue.

Cohen points to a recent month where The Ramada “had a lot of construction at that time. We sold more rooms than we sold for that same January last year. But it was less [revenue] because it was discounted.”

Thibodeau sees some discounting of properties as likely. “I think there is discounting going on. You can look at anyone’s website and see that discounting,” she said. However, she does not expect there to be deep discounting as the season gets closer.

“The [occupancy] numbers…they’re still going to be good even though the prices are going to be a little bit lower. I think volume and price…it’s not [going to be] that big of a hit,” she said.

Although occupancy revenue in 2024 fell slightly from $826 million in 2023, food and beverage revenue has increased every year since a 16.3% drop in 2020.

Chef Wes Stepp, owner of Red Sky Cafe and NC Coastal Cuisine in Duck, is quick to point out the increase in restaurant sales is a result of food prices and not because there are more people visiting area restaurants.

“The price of product went through the roof and so, if it’s a 5% (increase) or something like that, then I think it’s…inflation,” he said. He is optimistic, though, about the upcoming season for his restaurants.

“Right now, I feel pretty confident that, barring any storms or natural disasters, I see us having a good season,” he said.

Nonetheless, there are potential storm clouds on the horizon. Thibodeau, in her remarks to the Voice, agreed with Nettles’ concerns about “potential cuts to federal employees,” who have been a reliable feeder market, adding that, “I think that’ll be another year before we see how that plays out,” she said.