Is Hilton Head's restaurant industry on the rise?

bheffernan@islandpacket.comDecember 31, 2012 

Paul Chisholm, of Gillan's Fresh Seafood and Oyster Bar at South Island Square on Hilton Head Island, shucks oysters at the restaurant's raw bar. The restaurant, owned by brothers Joe and Ned Gilleland, opened in July and is part of a recent surge in new business openings on Hilton Head.

JAY KARR / STAFF PHOTO

This year might mark a turning point in the business prospects of restaurants and bars on Hilton Head Island, a review of town business licenses suggests.

During 2012, the town issued more business licenses for dining establishments than it has in five years and saw fewer licenses lapse.

Forty-seven restaurants and bars were licensed in 2012. During the four previous years, an average of 34 business licenses for restaurants and bars were issued annually, according to town data.

The data also indicate that 18 restaurants and bars' licenses lapsed in 2012. That compares to an annual average of 29 lapsed licenses between 2008 and 2011.

The numbers don't necessarily mean all of those businesses are opening or failing. New business licenses are required for changes of ownership or location, among other things.

But the numbers do give a general sense of positive market activity, said John Salazar, a hospitality and management professor at the University of South Carolina Beaufort and director of the Lowcountry and Resort Islands Tourism Institute.

Salazar said an increase in the number of tourists could have contributed to the health of the island's restaurants and bars.

The year saw 2.7 percent growth in visitors per day to the island, and a 3.9-percent increase in room occupancy compared to 2011, according to October data from the institute.

"The health of our restaurants is definitely tied to the health of our tourism industry," said Charlie Clark, spokeswoman for the Hilton Head Island-Bluffton Chamber of Commerce. "Not only are more people coming, they're spending more money."

Other likely contributors to this year's business license numbers include easier access to low-interest small-business loans and increased confidence in the local economy, Salazar said.

One measure of the strength of the local economy is the unemployment rate. On Hilton Head, it was 4.6 percent in October, the most recent month for which figures are available. That's nearly half the January 2010 rate of 8.6 percent, according to U.S. Bureau of Labor Statistics data.

More restaurants also mean more competition among them.

"We're working harder for our dollar than we've ever had to," said Steve Carb, president of Southeast Entertainment Restaurant Group.

Though sales are up, the group has been battling rising food costs as well as increased competition, he said.

"It seems that everyone who has a recipe wants to have a restaurant," Carb said.

Carb's group operates seven restaurants on Hilton Head, including Giuseppi's Pizza and Pasta, One Hot Mama's American Grille and Frankie Bones Restaurant and Lounge.

The group is considering opening two more eateries on the island next year -- one in the spring and another in the fall, Carb said.

Another restaurateur, Joe Gilleland, opened Gillan's Fresh Seafood and Oyster Bar on the island this summer.

He says he grew up in the restaurant business, washing dishes at Land's End Tavern at South Beach in Sea Pines in his teens. At 25, he and his brother co-owned their first restaurant, Charleston's Fine Southern Cuisine, on the island.

Gilleland, now 40, and his brother opened their fourth Hilton Head restaurant in July.

So how has business so far?

"Gangbusters," Gilleland said.

Follow reporter Brian Heffernan at twitter.com/IPBG_Brian.

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