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RESORT REVAMP

As old leisure destinations attract a younger set, retailers are following

By Steve McLinden

Despite its reputation as a retiree haven, Fort Lauderdale, Fla., is skewing younger these days. “Seniors and spring-breakers are just part of the mix,” said Francine Mason, spokeswoman for the Greater Fort Lauderdale Visitors & Convention Bureau. “We’re no longer the town of Where the Boys Are. We are where the boats are — and where the buys are.”

To keep pace with the changing demographics, local retailers and developers here and in similarly growing resort communities are seeking ways to cater to both an expanding herd of seasonal, second-home residents and a younger base population.

Retail consultant Stanley L. Eichelbaum, SCMD, the buyer of a condo in recently redeveloped downtown Fort Lauderdale, is experiencing the city’s changing face firsthand. Eichelbaum, 61, president of Cincinnati-based Marketing Developments, says he realized soon after moving into his new second home that the stereotypical plaid-clad seniors have given way to couples in their late 40s or early 50s and to young families with children. “It’s not just people waiting for their Social Security checks,” Eichelbaum said. “There’s also a youthful population migrating here that’s concerned about a quality living environment.”

In fact, all of Broward County, which includes county seat Fort Lauderdale and 30 other cities in south Florida, is leaning that way. The portion of Broward’s 65-and-older set dropped from 21.9 percent in 1980 to 16 percent in 2000. Projections are that this will fall to about 13 percent by 2010 as baby boomers age, according to the Broward County’s Department of Urban Planning and Redevelopment.

Witness Sawgrass Mills, in Sunrise, eight miles west of Fort Lauderdale, where the median shopper age is a sprightly 32. As area real estate prices have risen, so have household income levels and requests for more high-end stores, says Octavio Ortiz, the mall’s general manager. This prompted construction of the 127,000-square-foot Colonnade Outlets at Sawgrass addition, which opened in March with a tenant list that included Florida’s first Crate & Barrel Outlet, the very first David Yurman outlet jewelry store anywhere, a Neiman Marcus Last Call Clearance Center, a Salvatore Ferragamo upscale clothier unit and a Stuart Weitzman shoes-and-handbags store. “Our customers were asking for higher-end stores, and we wanted to deliver them before someone else did,” Ortiz said. He sees a far younger and more affluent demography than a decade ago. Accordingly, the mall now advertises in fashion magazines geared toward the younger set.

“It’s an upscale market,” said Crate & Barrel spokeswoman Bette Kahn. “And Sawgrass is a very vital mall.” The increasingly diverse customer base of year-round residents surrounding the mall attracted Crate & Barrel to Sawgrass, she says. “There are some very well-off residents to go with all those tour buses coming through with people on day trips from cruises.”

Downtown Fort Lauderdale, too, has changed to capture more of this audience, Eichelbaum says. A short morning stroll from his downtown digs often takes him through an oasis of tony mixed-use venues, past the Mediterranean-style Las Olas Riverfront complex and trendy shopping venues like the Riverwalk and Las Olas Boulevard, a tree-lined corridor of quaint shops, restaurants and galleries that leads to the city’s famous beachfront.

Eichelbaum, who shuttles between Florida and his business in Cincinnati, ticks off the walking times to his other favored venues: two minutes to one Starbucks, three minutes to another, seven minutes to the cinemas, eight minutes to a performing arts hall. The area “has changed its charter and culture,” he said. “It’s become an attractive environmental economy very similar to Santa Fe and San Francisco.”

Indeed. William Maus, owner of Maus & Hoffman, a chain of six exclusive men’s stores in coastal Florida, says he is witnessing more shopper affluence than ever. “And we have slowly seen growth in the number of younger customers,” he said. While there are still Chico’s and other stores geared to an older group, Fort Lauderdale shops are adjusting to a younger clientele. At Flora Ottimer Children’s Boutique on East Las Olas Boulevard, “there’s a good mix of people year-round,” said sales associate Shannon Porter. “We get a number of families with children who live right down the street.”

Perhaps best symbolizing the area’s transformation, the infamous Fort Lauderdale Candy Store bar, known for “belly flop” exhibitions and wet-T-shirt contests held at its pool, was torn down and a $200 million St. Regis resort is set to open in its stead in December along Highway A1A near Cortez Street. “The beach has changed from motels to high-rises and the quality of retail is rising with it,” said Steven Shalig, the resort’s general manager. St. Regis will have just 2,500 square feet of shop space but the neighboring 272,000-square-foot Beach Place shopping center, which has about a dozen restaurants and mostly regional retail, is doing some re-tenanting to address the changing demographic, he says.

The $200 million Trump International Hotel and Tower, one of several condo resort hotels under development locally, is scheduled to open next year on North Atlantic Boulevard between Las Olas and Sunrise boulevards.

Resorts, which are generally considered to be hotels or condos distinguished by on-site or nearby recreation, shopping, dining and entertainment space, are undergoing similar changes in orientation across the U.S. “They are seeing a transition from a recreation economy to a quality-of-life economy,” said resort development consultant Ford Frick, managing director of Denver-based BBC Research & Consulting. “It’s not just the golf or the skiing driving it, it’s the whole lifestyle attraction fueled by the baby boom — and the extraordinary liquidity they’ve accumulated. And it has a lot of ramifications for retailing.”

A few thousand miles to the west in the Rocky Mountains of Colorado, lease rates have gotten so high in such resort towns as Vail and Aspen that many shops and boutiques have been forced to follow what Frick calls the “next town down” syndrome, meaning they are forced to relocate to neighboring villages. Most locals, including resort employees, cannot afford to live in these communities so they, too, are prone to such next-town migration, says Frick.

National retailers are following the money. Shops in the fast-growing Colorado cities of Carbondale and Glenwood Springs continue to bask in the economic glow of neighboring Aspen, while such cities as Frisco and Gypsum benefit from exclusive Vail, he said. In Gypsum, 25 minutes west of Vail on Interstate 70, a Costco is under construction. It’s the first time Costco has entered a community this small — Gypsum has about 6,000 residents. Washington, D.C.-based Next Realty has proposed 300,000 square feet of additional retail and commercial space there.

Frick says several retailers “are coming into these communities a little prematurely to tie up the last remaining parcels to position themselves for the future.”

Costco aside, many retailers in or near resort towns have their eye on the luxury retail customer. That shopper, roughly 42 years old and with about $145,700 in yearly household income, spent $25,972 on luxury travel last year, up from $18,474 in 2004, according to a survey by Stevens, Pa.-based Unity Marketing. About a third of these respondents to the survey said they have stayed or will stay at a luxury resort in 2006.

A Harris Interactive survey of Americans between 42 and 60 conducted for the National Association of Realtors shows that 7 percent of this group already owns either a vacation home or seasonally occupied property. About 40 percent of those who own such a property say they intend to make it their primary residence someday, the survey says.

Middle-age boomers “are a segment of the population that really prioritizes lifestyle, and they certainly have economic means to buy a second home,” said David Hehman, CEO of Orinda, Calif.-based Escape Homes, an online marketplace and referral service for resort properties and second homes. In fact, they are driving the [resort home] boom.”

Sales of U.S. resort time-shares reached approximately $8 billion last year, up 116 percent from five years ago, according to Eugene, Ore.-based Ragatz Associates, a market research and consultant firm to the resort industry. “Over the next 25 years, there will be an even greater bell curve of affluent people moving from full-time work to some kind of leisure living,” said Howard Nusbaum, president and CEO of the Washington, D.C.-based American Resort Development Association. “This is the generation that developed Botox and Viagra. They have a wanderlust, and they want to go out and explore.”

In light of such demographic nuances, many established resort players have been forced to rethink their strategies, products and leaseholds, say resort experts. “People want to go to places like Palm Springs for the weather, but they also want to shop,” said Nusbaum. “More than ever, the resorts are acutely aware they need unique shopping as an amenity.” Currently, “take it back home with me” sculptures, paintings and other artwork — not chain stores — are most popular in or on the immediate periphery of resorts, as are items relating to the resort’s recreational specialties, like golf, skiing or beach use.

Resort retail development remains an inexact science, demographers say. There is little hard-and-fast marketing data on the typical migratory resort community, says Richard Hollander, president of the Customer ID division of Fort Worth, Texas-based Buxton Co., a retail site-selection company. Thus, he explains, successful site selection depends on peripheral information about the number of hotels, restaurants and recreational facilities in a resort area and how many people they employ.

Resort demographics vary greatly too. The typical owner of a time-share reports household income of $80,000 a year, while the typical “fractional owner” (who generally buys into more elite properties he will occupy between one and three months out of the year) earns about $250,000 in household income per year, according to Ragatz.

Nusbaum sees no end to growth in resort ownership and development. Most of the larger full-service hotels that are being built offer a mix of condos with whole or fractional ownership and time-shares. “Typically, a 1,500-unit hotel will have a couple hundred such units,” he said. “Over the next 25 years, we are going to have even more affluence, because baby boomers are the first generation that has dual-income families, and they will be followed by another generation of two-income families.”

Retailers, start your engines.

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