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March 22, 2003
Uncertainty Principle:
Most find business as usual
By THOMAS S. BROWN | News-Journal Business Writer
DAYTONA BEACH — As tanks raced toward Baghdad on Friday, Daytona Beach tourism promoters halted their national television advertising, uncertain whether it´s the right time to encourage long-distance travel.
But for short-distance travel, an area gasoline distributor and station operator said gas prices are expected to come down some.
Thousands of college students continued arriving for Spring Break, a ritual that pumps nearly $200 million into the local economy. Only about 5 percent of the students had canceled their travel plans, mostly because of military obligations, hotel operators reported.
At many companies in the Volusia-Flagler area, employees caught glimpses of the Iraqi war on television sets but work continued normally.
“It´s only Day 3 of this war,” said George Mirabal, president of The Chamber, Daytona Beach/Halifax Area. “I haven´t heard or seen any negative impact on our local businesses.”
However, uncertainty caused by the war appears to be slowing down plant investments, said Lou Fifer, president of the Volusia Manufacturers Association, and John Ferguson, chairman of the Halifax Trade Council.
Fifer said orders for big machines and other capital goods “are on hold, pending what will happen.”
“People are not willing to take that step for fear of the unknown,” Ferguson said.
At Raydon Corp., technicians tied yellow ribbons around trees outside their plant and took special pride as they watched TV scenes of U.S. tanks crossing the desert. Battlefield simulators rushed into production at the Daytona Beach plant a few months ago helped train Third Infantry tank crews sent to Iraq.
“We were humping and jumping,” said Don Ariel, Raydon´s president, describing efforts to get the portable units to Fort Stewart, Ga., in a hurry.
Another military order was filled recently at Tanning Research Labs, the makers of Hawaiian Tropic sun care products. The Ormond Beach plant shipped out 36,000 bottles of Ozone, which has a sun protection factor of 70, the highest in the U.S. market.
But Jack Surrette, executive vice president of sales and marketing, wasn´t celebrating. He said the order was relatively small and he remained worried about the war´s overall impact on tourism. Fewer people at beaches could seriously hurt his company.
Area gasoline prices held steady, averaging $1.74 a gallon. A DeLand distributor said a quick American victory in Iraq will bring relief at the gas pumps. The price of oil has dropped sharply in the past week, dropping to $26.85 a barrel Friday in New York.
“We´ve already had a big run-up in prices in the last eight weeks,” said Steve DeLuca of Delco Oil. “If things continue to happen as quickly as they have (the last couple of days), we should start seeing lower prices on the street in the next two weeks.”
Some economists are less optimistic about the chances for a break in oil prices. Yale economist William Nordhaus warned heavy damage to Iraqi oil fields could cause prices to balloon, adding as much as $778 billion to America´s energy bill over a five-year period.
Along the beachside locally, some hotel workers said this year´s Spring Breakers seemed less rambunctious.
“The kids are more subdued,” said Larry Kelly, a retired mayor and spokesman for the Oceans Resorts hotel group. “This is a quieter Spring Break.”
Scott Edwards, chairman of the Spring Break Marketing Committee, said the war was putting a small dent into the collegiate crowd, which normally averages about 150,000 over an eight-week period.
“Some students have been called up by the National Guard or have been told that they are about to be called up and therefore, they can´t go more than 50 miles from home,” Edwards said.
Susan McLain, spokeswoman for the Daytona Beach Area Convention & Visitors Bureau, said bureau director Sharon Mock had suspended Daytona´s tourism commercials on cable networks around the nation for a two-week period.
“She postponed the ads to get a feeling for what the public opinion is,” McClain said. If the war ends quickly, the ads likely will resume, she said.
In the meantime, the bureau is concentrating its efforts closer to home, trying to draw travelers from within Florida and nearby states.
No out-of-town callers to the bureau have asked questions related to the war, McClain said. Instead, they seem more interested in recent reports of high bacterial levels along the beach.
Tighter security rules have returned to Daytona Beach International Airport, reviving precautions taken in the months after the Sept. 11 attacks. The airport has closed its short-term lot, the parking area closest to the terminal, and is randomly searching vehicles as they arrive, said Nick Scott, director of security for the Transportation Security Administration.
However, local flight schedules have not been cut back, despite financial troubles plaguing most airlines. In fact, Delta Air Lines is going ahead with plans to add a Saturday afternoon departure for Dallas/Fort Worth, starting April 6.
At the Daytona Beach Flea Market, merchants were capitalizing Friday on the latest spurt of patriotism.
At her booth, Pat Goodman put out T-shirts with graphics of American flags and eagles. Shirts with slogans of “Saddam Hussein, wanted dead or alive” and “Target Iraq” were selling two for $10.
“I just put them out today,” Goodman said. “We normally do well. Everyone wants a patriotic T-shirt when they have a problem.”
Small-business people seem to be focusing on day-to-day details and local networking, said Linda White, executive director of the Orange City-based Chamber of Commerce of West Volusia.
“Staying in touch with each other seems to be where they´re finding their comfort and will to keep going,” White said. “They´ve amazed me.”
The effect of war on local business
Daytona Beach Convention and Visitors Bureau suspends national tourism promotion for two weeks.
A sharp drop in oil prices could lead to a decline in area gas prices.
College students continue arriving for Spring Break, but seem more subdued this year.
War uncertainty seems to be slowing down investments in area manufacturing plants.
Security has tightened at Daytona Beach International Airpot, but no cutback in flights.
The Dow Jones Industrial Average rose more than 235 points.
Business Writers Joe Crews, Jim Haug and Valerie Whitney contributed to this report.