Okaloosa business leaders share views on gas price spikes

Tony Judnich
Northwest Florida Daily News

On June 13, AAA reported that the national average price of a gallon of gasoline rose to $5.01 — an all-time high never seen since the organization began collecting pricing data in 2000. 

While they still linger below that record high, rising gas prices in the local area along with an overall shaky economy have altered customers’ spending habits at some local restaurants.

For example, while Fudpucker’s Beachside Bar & Grill in Destin still sees a similar number of patrons as it did a year ago, “People don’t have the same amount of expendable income that they did then,” said Chester Kroeger, who founded the popular restaurant four decades ago.

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Tony Pate with Fudpucker's restaurant in Destin serves lunch to the Stoddard family (clockwise from left) Rhett, Kylee, Aubrey, Misti and Paul, who were visiting the area from Texas. Fudpucker's founder Chester Kroeger says he has noticed that visitors are ordering less expensive meals at the restaurant.

“They’re still going out to buy food and drinks, but they’re not buying (Fudpucker) T-shirts or hats,” Kroeger said June 14. “Whenever people get squeezed, whether it’s by high gas prices or inflation, they spend less on items that are not as expendable. We’re not seeing any fewer customers, but they’re not spending as much on ancillary items.”

Many budget-wary diners have been choosing lower-priced menu items at the restaurant, he added.

For instance, “Our sales of chicken fingers are much higher lately compared to higher-priced items such as our seafood platter,” Kroeger said.

Analysts cite the almost four-month war between Russia and Ukraine, a rebound in demand for gasoline in China and not enough oil-refinery capacity in the United States as some of the main factors in surging gas prices.

But high fuel costs and inflation “are just the tip of the iceberg,” said Kroeger, who added that lingering supply shortages that began at the start of the COVID-19 pandemic also increase the cost of doing business.

“That means higher food prices, which leads to a higher number of complaints from customers,” he said. “This economy is a mess.”

The nation’s unstable economy also has led to menu price increases at other local restaurants, such as at the four area AJ’s restaurants.

Katie Pettit and daughter, Addison, shop for T-shirts in the gift shop of Fudpucker's restaurant in Destin. Fudpucker's founder Chester Kroeger says the restaurant is not selling as many T-shirts and other souvenirs as in previous years.

“We have had to increase our prices like everybody else,” AJ’s Restaurant Group spokeswoman Rachael Green said, “but we haven’t noticed people ordering differently off of the menu.”

Although the number of airline passengers at Destin-Fort Walton Beach Airport has skyrocketed in recent years, Okaloosa County remains primarily a drive-to destination, according to the county Tourist Development Department.

Green agreed.

“We’re a one-tank driving destination,” she said. “I don’t think families are ready to give up their vacations yet. We’re seeing a lot of families still coming to all of our locations. From what we can tell, tourism still seems to be thriving in our community.”

As gasoline inches closer to $5 a gallon, travelers fuel up at an Exxon station in Freeport, just north of Walton County's beaches. Many tourists are not making lodging reservations as far in advance and are staying fewer days than in recent years, said Ken Wampler, chairman of the Okaloosa County's Tourist Development Council.

Green said the AJ’s restaurants lately have seen an uptick in visitors who have driven here from South Florida and other parts of the state for sports tournaments in Fort Walton Beach and Destin.

Ken Wampler, chairman of the county's Tourist Development Council, noted that bookings at many area short-term rental properties began to tremendously slow down during the early stages of the war between Russia and Ukraine.

Those early stages included the implementation of economic sanctions on Russia by the United States and other nations.

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“Gas prices started rising and we started to feel that impact,” said Wampler, who besides chairing the TDC serves as president of Destin-based Newman-Dailey Resort Properties Inc.

The company oversees more than 300 short-term rental properties, including Destin beach houses and vacation homes along Walton County Road 30A.

“Normally in the short-term rental business we see a significant amount of bookings in March and April, but they slowed down significantly because of inflation and the war,” Wampler said. “It’s clearly impacting tourism in many parts of the country.”

Sarah Veal (left) and Megan Archer with Fudpucker's restaurant in Destin serve lunch to Kim Ruppert, her daughter Graceln Rae and other family members Wednesday afternoon.

Also because of severe “worldwide events,” many tourists who used to book their summer vacations on the Emerald Coast a year in advance began reserving short-term rentals much closer to their arrival time, he added.

In March, such reservations on average were made just 14 days before the start of a vacation, he said.

“Many tourists are taking advantage of a lower demand,” Wampler said. “Many properties are still available at the last minute and, because of inflation and the economy, the rates go down.”

He also noted that during the last two years there has been an increase in the number of visitors who arrive and depart the area throughout the week versus only on Saturdays. In addition, more visitors are having shorter vacations.

“We’re having fewer people stay for seven nights, so they’re actually eating out more,” Wampler said. “Those staying for a week are still cooking in their rental units.”

According to estimates released in May from Visit Florida, the state’s official marketing arm, Florida saw 36 million visitors from January through March of this year.

That total marked a 14% increase from the fourth quarter of 2021 and the third consecutive quarter that overall visitation surpassed pre-pandemic levels, according to Visit Florida.