Analysis: Florida market retains its appeal

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When Edelweiss Air needed to make a snap decision on where to send its new Airbus widebody jet the answer came pretty easily: Florida.

It was earlier this year that the Swiss carrier had to think of an attractive destination for its A330-300, and fast, after Japan's earthquake meant a new route to the Far East from Zurich had to be postponed, explains Michael Trestl, Edelweiss business development manager.

Having Florida on the route network is a must for many carriers. It is, for example, a hugely popular destination for the customers of large Canadian tour operator Sunwings. "This winter our programme will offer 11 flights a week to three Florida destinations - Fort Lauderdale, Orlando International and St Petersburg," says Daryl McWilliams, vice-president sales & marketing.

"Florida certainly does represent good value for money," he adds, especially today with weakness of the US dollar making the cash of Canadian travellers go further than before.

For the most part, the big three airports in Florida have weathered the downturn better than their smaller rivals.

As the table shows, Miami, Orlando International and Ft Lauderdale have all grown since 2006 whereas several other airports have suffered significant falls in traffic.

Tampa is one that has been hit, down nearly 12% in the four-year period. That could soon change as a new management team, under the leadership of former Dallas/Ft Worth executive Joe Lopano, has been drafted in to revive its waning fortunes. Tampa had stagnated while other US airports used dynamic marketing tactics to secure new airline service.

"We have demonstrated that our airport loses tons of traffic to other airports. To be successful you have got to be aggressive in marketing," says Lopano, and his team has introduced a new financial incentive scheme, an economic impact study and "united the community behind a message of growth". "We believe in the power of the region. We are going to be the gateway to the west coast of Florida," he adds.

Tempting Edelweiss to defect from its original choice of Orlando International from May 2012 is a major coup for Tampa.

Lopano hopes his new strategy will secure more service from European carriers while Brazil and other Latin destinations are high on the Tampa hit list too.

However, has the Tampa initiative destabilised the Florida market? Good luck to them, say most airports, with many saying anyone who promotes Florida as a destination is doing the state a good turn. However seasoned airport executives, including Tampa's own team, know the long-term viability of a route is only as good as the market it serves.

"A route has to be sustainable with a solid business case without incentives," says Vicki Jaramillo, director of marketing at Orlando International. Incentives do offer financial help in the early days to get a route off the ground, but they are "gravy", she added.

"You can throw all you want at airline service but it always circles back to where the people want to go - nothing else," says Michael Walley, director of development & community relations at Sarasota-Bradenton International.

Walley points out that Florida is a good volume market, but its strong leisure component means low yields are commonplace.

To raise yields, travellers have to be willing to pay more, which means "the tourist industry needs to work very hard on its value proposition", says Walley.

Selling Florida is crucial for all international airports, as they acknowledge their competition can be as diverse and widespread as Cancun in Mexico or Phuket in Thailand.

However, is Florida as a destination getting tired?

No way, says McWilliams of Sunwing. "I don't think there's a need for Florida to reinvent itself. The quality of its tourist facilities is superb."

"Florida is still good value in these troubled times," says Alfredo Gonzalez, vice-president, tourism & international business at the Greater Fort Lauderdale Convention & Visitors Bureau. The airport that serves this region has been successful for a variety of reasons, not least because the city's port has become the world's busiest cruise market, adds Gonzalez.

Of course, many visitors flock to the state for its fantastic theme parks. "You can't think of Florida without thinking of Disney," says McWilliams. There are other big parks too, including the new Wizarding World of Harry Potter in Orlando while the world's fifth Legoland opens in a few days.

Being in the centre of the state means Orlando International is an attractive gateway to these attractions, says Jaramillo.

The big prize for Florida's airport marketers is international service. The UK, for instance, is a large market, but it has had its problems in the past few years.

"It has been a bit of a roller-coaster," says Greg Dull, vice-president marketing at Orlando Sanford International Airport, which is a popular entry point for European charter carriers.

Sanford has been hit in the past couple of years by the collapse of large UK-based transatlantic players XL Airways and Flyglobespan, says Dull.

Walley at Sarasota points to Monarch Airlines cancelling its Boeing 787 order to focus on short-haul business and Thomas Cook axing five widebodies from its winter fleet as further evidence of pain at UK carriers. There are issues for the state's airports for sure, but most appear reasonably confident about the outlook for 2012.

"The Miami market has become the second leading destination [in the USA] for international tourists - that tells you something," says Chris Mangos, marketing division director for Miami International Airport.

As it overtakes Los Angeles in this regard, Miami is seeking to build on its large international traffic base, said Mangos, and not just to its naturally strong markets in Latin America.

Having worked hard over the past eight years to bring in four Asian carriers and their freighter arms to Miami, the next stage is to convince them the traffic is there for a passenger service, he said.

Also high on Miami's hit list is service to Turkey and the Gulf. "Our strategy of developing secondary markets in western Europe has worked like a dream," says Mangos, with Milan, Paris Orly and Barcelona now connected to Miami. Others points in central and eastern Europe are now on Miami's radar.

"For us the bright spot continues to be the international market," says Jaramillo at Orlando International. It has or soon will be adding service from Caribbean Airlines, VivaAeroBus of Mexico, LAN, TAM and British Airways.

"Domestically we are still waiting to see what markets are affected by the AirTran/Southwest merger," she adds, with some smaller markets likely to be lost.

At nearby Orlando Sanford a big priority is to capitalize on its new Brazilian business, said Dull. This is seeing Orlando-based tour operator SST Air start seasonal flights [flown by Vision Airlines 767s] to Sao Paulo and Brasilia.

As well as looking south and east, most also look north. "We are picking up more Canadian service than we've ever had," says Gonzalez from Fort Lauderdale.

At some point too he believes more exotic markets like Russia, China and India will come under Florida's spell.