Gas Prices Are Helping Tourism - Spring 2016

Falling oil prices nationally – from a peak of about $110 a barrel to around $35 a barrel earlier this year – have boosted Sarasota tourism numbers and may, in turn, be positively impacting prices for local hotels and the rents retail center owners can demand from tenants.

Historically, lower gasoline prices have benefited areas like Sarasota that are heavily reliant on transient tourism traffic and snowbird retirees, and Harshman & Co. believes the current dip is generating a similar result. As such, look for both retail and hospitality sales for the balance of 2016 to carry with them more compressed cap rates, as sellers look to capitalize on higher sales, greater occupancies and increased average daily room rates. In addition, we contend that incremental bumps in oil prices will have little overall impact on potential sales, because historically the Sarasota area has absorbed increases and tolerated them without an interruption in growth.