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The Sunshine Economy

The Sunshine Economy: How Hotels Hope to Rebound from COVID-19

CV-Hotel Cleaning 05292020.jpeg
Al Diaz
Miami Herald
Hotels in South Florida were shutdown for about three months. Hoteliers say the rebound will initially rely on Americans vacationing to the region. The Biltmore lobby in Coral Gables gets a cleaning on May 29, 2020.

Winter can’t come fast enough for South Florida’s hotels. The industry is struggling with fewer people traveling. Demand remains low in most places with tourism and business travel still way down.

Jonathan Plutzik won't go as far as wishing for an early snowstorm or cold snap in the northeast, but he is hopeful that the weather is turning to favor his business.

He owns and runs The Betsy Hotel on South Beach. It has been closed since late March. As other hotels have reopened, Plutzik made the strategic decision to stay closed. The earliest one can made an online reservation at his hotel is late October.

"A huge chunk of our market simply disappeared," he said.

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When travel restrictions and business shutdowns were put in place in the spring, to slow the spread of COVID-19, South Florida hotels were at their busiest. Occupancy was high, and so were hotel room prices.

Then the pandemic set the business plummeting into a deep recession — one that the industry continues dealing with, more than six months later.

"I can tell you right now, we're down 40 percent over last year," said Donna Boucher, owner and operator of the Manta Ray Inn on Hollywood Beach. It is a small property with fewer than a dozen suites. Usually it caters to Canadians and Europeans escaping winter. But travel restrictions and travel worries make it impossible to see what the traditional busy season may bring.

"Right now, we're depending on the drive market. And, especially for people in Florida, they do not normally travel in October, November into December," said Boucher. "So, yeah, we're having a real struggle here in Hollywood."

She hopes to be able to regularly fill just one of her suites while waiting for the traditional high season.

Jim Bernardin has seen business bounce back faster at the hotel he owns and runs in Islamorada — Pines and Palms Resort. "It's not terrible. It's just scary," he said. "You really can't predict. September surprised me."

It was a good surprise. While he sold about half the number of rooms than a year ago, he said his revenue was about the same because he was able to hold his room prices up. He's confident he can keep the rates up as the traditional season approaches, even if travel restrictions and virus worries keep international visitors away from the Keys.

"We're going to be meeting a lot of new Americans who maybe are changing their plans and want to drive to the warmest place you can drive to by car — and that's the Florida Keys and South Florida," he said.

Most people who stayed in South Florida hotels last year were here for the fun of it. More than half the guests were vacationers according to data from the Greater Miami Convention and Visitors Bureau. Those are the travelers who will drive whatever recovery South Florida hotels will experience.

Business travelers made up a much smaller share of visitors and with working from home still being the routine for many companies, those business travelers aren’t likely to hit the road soon.

"Business (travelers) are not returning yet," said Claudia Di Gino, general manager of the Novotel Miami Brickell. The hotel was designed to attract both business and pleasure travelers. It is on the edge of the Brickell-Downtown Miami neighborhood. "Especially in this area, the majority of the offices haven't been back. I think that once there is more news on the vaccine or more countries opening up and more flights, I hope to see [business travelers] coming back," she said.

In Miami Beach, demand for hotel rooms over the Labor Day weekend helped hotel revenue per available room return to the same level as a year before. However, that recovery was short-lived.

Plutznik on South Beach is optimistic for what the winter will bring, though. He thinks South Florida hotels have the geography to recover.

"It does require a cold wave or a snowstorm to get people's minds really focused on, 'What am I going to do in February.'"

In a journalism career covering news from high global finance to neighborhood infrastructure, Tom Hudson is the Vice President of News and Special Correspondent for WLRN. He hosts and produces the Sunshine Economy and anchors the Florida Roundup in addition to leading the organization's news engagement strategy.