The name Avila commemorates Miguel Ávila, who was granted Rancho San Miguelito in 1842. The town was established in the latter half of the 19th century, when it served as the main shipping port for San Luis Obispo. Around this time, Luigi Marre built a honeymoon hotel here and steamboats brought customers from San Francisco and Los Angeles.
Although Avila Beach still has a working commercial fishing pier and the inland areas have extensive apple orchards, tourism is now the main industry. There are few historical structures remaining; among the oldest is the Point San Luis Light, built in 1890 after a series of shipping accidents.
In the late 1990s, Unocal began the cleanup of decades old oil seepage discovered years earlier from corroding pipes under the township, and which had caused a massive oil spill under the town. Over 6,750 truckloads of contaminated material was sent to a Bakersfield Landfill, and replaced with clean Guadalupe Dunes sand. Many of the town's homes and businesses, including several blocks of Front Street and Front Street Buildings, were razed as a result of the quarter mile wide excavation. Today, new buildings, homes, businesses, modern walkways and sea motif walls and benches take their place. A Sea Life Center welcomes visitors to explore the local ocean inhabitants up close.
The beach itself is less than 0.5 miles (0.8 km) long and sheltered in San Luis Bay, which is formed by Point San Luis on the west and Fossil Point on the east. Avila Beach faces south and the 600 foot elevation of Point San Luis breaks the prevailing northwesterly winds. It is therefore usually warmer than the other beaches on the Central Coast. Most of Avila Beach is undeveloped, except for a few blocks adjacent to the beach with homes, hotels, and small businesses, and a few recently built upscale housing developments inland, near a golf course. Avila Beach is also known for its hot springs, which are used for resort spas.
According to the United States Census Bureau, the CDP covers an area of 6.0 square miles (15.6 km²), 99.71% of it land, and 0.29% of it water.
Many people mistakenly pronounce the town's name as ah-VEE-lah given the name's Spanish origin. However, the correct Spanish pronunciation is AH-vee-luh. Ordinarily, the penultimate syllable of Spanish words is stressed, except when indicated by an accent over a different syllable. In Spanish, Avila is actually spelled "Ávila" thus indicating that the first syllable, not the second, is stressed.
Average temperatures vary little during the year, ranging from the upper 40s to low 70's Fahrenheit from November through April, and from the 60's to low 80's from May through October. Average annual rainfall is 15 inches. Along with much of the California coast, winter is the wet season, with more than 70% of the yearly rain falling from December through March, while summer brings drought conditions.
The 2010 United States Census reported that Avila Beach had a population of 1,627. The population density was 269.9 people per square mile (104.2/km²). The racial makeup of Avila Beach was 1,507 (92.6%) White, 13 (0.8%) African American, 7 (0.4%) Native American, 33 (2.0%) Asian, 0 (0.0%) Pacific Islander, 34 (2.1%) from other races, and 33 (2.0%) from two or more races. Hispanic or Latino of any race were 111 persons (6.8%).
The Census reported that 1,627 people (100% of the population) lived in households, 0 (0%) lived in non-institutionalized group quarters, and 0 (0%) were institutionalized.
There were 842 households, out of which 115 (13.7%) had children under the age of 18 living in them, 416 (49.4%) were opposite-sex married couples living together, 39 (4.6%) had a female householder with no husband present, 16 (1.9%) had a male householder with no wife present. There were 36 (4.3%) unmarried opposite-sex partnerships, and 14 (1.7%) same-sex married couples or partnerships. 296 households (35.2%) were made up of individuals and 108 (12.8%) had someone living alone who was 65 years of age or older. The average household size was 1.93. There were 471 families (55.9% of all households); the average family size was 2.45.
The population was spread out with 183 people (11.2%) under the age of 18, 74 people (4.5%) aged 18 to 24, 263 people (16.2%) aged 25 to 44, 597 people (36.7%) aged 45 to 64, and 510 people (31.3%) who were 65 years of age or older. The median age was 56.9 years. For every 100 females there were 91.4 males. For every 100 females age 18 and over, there were 92.0 males.
There were 1,093 housing units at an average density of 181.3 per square mile (70.0/km²), of which 529 (62.8%) were owner-occupied, and 313 (37.2%) were occupied by renters. The homeowner vacancy rate was 3.1%; the rental vacancy rate was 7.4%. 1,074 people (66.0% of the population) lived in owner-occupied housing units and 553 people (34.0%) lived in rental housing units.