• Tourism Taxes Jump in Disney World’s Home County, Remote Work Declines, Strong Industrial Returns Ex

    Tourism Taxes Jump in Disney World’s Home County

    Returning theme park visitors are demonstrating their economic clout in Orange County, Florida, as Disney World, Universal Orlando and SeaWorld, among other attractions, posted record collections of a tourism development tax tied to hotel stays.

    The county collected more than $38.5 million in March, a 118.2% increase from the year earlier, County Comptroller Phil Diamond reported. A statement from Diamond’s office noted that collections reached a record, shattering the previous high of $31.3 million set in March 2019, a year before the start of the pandemic.

    Many U.S. regions with theme parks could see, or are anticipating, similar gains from pent-up demand as visitors come back with pandemic restrictions easing. They’re not only staying in hotels, boosting Orlando’s hotel occupancy rate to a pandemic-era high of 82.5% in March, but raising demand at nearby stores, restaurants and other entertainment and service businesses, along with housing for local workers.

    Disney and its major U.S. theme park rivals have reported attendance approaching pre-pandemic levels, with some locations surpassing demand seen just before the pandemic closed parks or forced them to operate at limited capacities for well over a year. At the same time, they are also dealing with staffing shortages and rising costs for labor, food and construction materials needed for new rides and other development projects.

    Orlando-based SeaWorld Entertainment, for instance, saw its highest first-quarter attendance since 2013 at 12 U.S. parks, as 3.4 million visitors generated record quarterly revenue of $270.7 million and the company narrowed a string of quarterly net losses to $9 million. Announcing those results May 5, SeaWorld CEO Marc Swanson said the trend shows continued recovery momentum from 2021 but “does not yet reflect a normalized operating environment,” as international and group visits have yet to return to pre-pandemic levels.

    Disney, scheduled to release its quarterly earnings May 11, is embroiled with Florida officials over the company’s stance against the so-called “Don’t Say Gay” education law that limits how teachers in the state address sexuality. The state has rescinded a special district that allowed Disney to tax itself to operate certain municipal services for the past five decades, and it must now address how to pay costs for those services that would be borne by the public.

    Remote Work Declined as April Jobs Grew

    Tucked within April numbers showing the U.S. added 428,000 jobs as the unemployment rate stayed a historically low 3.6% were household survey data showing work from home ticked down slightly from the prior month.

    Office landlords might be cheered by Labor Department household survey data released May 6, showing 7.7% of employed respondents teleworked or worked from home at some point during the four weeks preceding the April survey because of the pandemic. That was down from 10% in March.

    That jibes with monthly reports by technology provider Kastle Systems, showing office attendance generally rising during the past year but yet to crack 50% in most major cities since the start of the pandemic. Kastle said its numbers, based on anonymous keycard data, showed the big-city average at just over 43% for the last week of April, up 3 percentage points from the prior week.

    Also, 1.7 million people told the Labor Department that they were unable to work because their employer closed or lost business because of the pandemic in April. That was down from 2.5 million in March.

    Sectors that created the most jobs during April, potentially signaling increased or stable property demand, included leisure and hospitality with a gain of 78,000 from the prior month, manufacturing increasing by 55,000, and transportation and warehousing rising by 52,000. However, overall non-farm employment was still down 1.2 million jobs or 0.8% from the pre-pandemic level of February 2020, the Labor Department reported.

    Strong Industrial Returns Expected

    Despite recent signs that companies such as Amazon are scaling back plans for warehouses, economists at the Urban Land Institute are expecting U.S. industrial properties to deliver better investment returns than most other categories in 2022 and beyond.

    Combining industry data and surveys of 47 economists and analysts, the development-focused research organization’s spring real estate forecast predicts industrial properties garnering returns of about 20% this year, before moderating to lower long-term averages over the next two years.

    With home deliveries still a big part of the economy and supply chain issues still being worked out, industrial buildings are expected to top 2022 returns for the still-strong apartment category, projected to return 14% to investors. Office investments are expected to return 5.7%, with retail properties posting a 5.4% gain.

    “The projections tell us that although the prospects of a recession have increased, the impact on real estate should be limited,” said ULI Global CEO Ed Walter, in a statement prior to a May 4 webinar discussing the forecast. “It should also not be overlooked that while the downtown office market continues to face challenges, well located, newer office space is expected to bounce back in the next 12 months.”

    Source: www.CoStar.com