With beaches closed for 4th, South Florida’s hospitality industry absorbs another blow

Last July 4, Miami-Dade hotels were nearly full, with the occupancy rate reaching 90%, according to hospitality data firm STR. This year, with the area set to hold a muted Independence Day, the area will be lucky if it hits half that.

Hoteliers had hoped for a robust holiday, the first since Miami-Dade and Broward lodgings reopened. But as COVID-19 cases surged over the past week, government officials closed beaches and bars, and restricted pool use — leaving local hospitality businesses bracing for another punch.

Heading into this week, occupancy for the Miami market stood at 36%, according to STR. That figure will be closely watched when it is reported next week.

Based on interviews with local officials, a 50% occupancy rate would be a victory. William D. Talbert III, president and CEO of the Greater Miami Convention & Visitors Bureau, the county’s public-private tourism marketing agency, said hotels have seen cancellations as a result of the virus surge and subsequent closures.

But he said the decision, handed down late Tuesday, by Miami-Dade to leave hotel pools open, though only during daylight hours and at 50% capacity, served as a much-needed “gift” to local hoteliers.

“That pool decision was very important given the beach decision,” he said. “It shows support for the local hospitality industry.”

Lisa Cole, director of communications in the Americas for Hilton, said in an email Wednesday it was too soon to tell what impact the recent beach closures may have on the holiday weekend.

Cole pointed to data from The American Hotel Lodging Association showing that just 33% of those traveling this year plan do to so over the July 4th weekend.

And the post-holiday traffic might not be much better. Overall, 15% fewer Americans will travel 50 miles or further from their homes this summer than last, predicts AAA. It’s the first decline in summer travel since 2009.

July 4 bookings are strongest in smaller markets, said AHLA, citing data from travel technology provider Amadeus. Among the top 25 travel markets, only Norfolk/Virginia Beach has eclipsed 50 percent occupancy, the AHLA says. In Florida, the Panhandle has the strongest bookings, according to Amadeus. Airbnb’s July 4 trending destinations do not include any in Florida. Likewise, AAA hotel bookings show Orlando as the only Florida destination in its Top 10.

Some who may have considered visiting might simply not have booked. AAA said trends show Americans are booking spur of the moment.

Most travelers view beaches as a commodity, said Jan Freitag, an analyst with STR, and may simply have gone elsewhere.

“The data continues to be strong for weekends, for the beach, for parks, for great outdoor access,” Freitag said. “Basically, submarkets with a beach have done very very well in this uptick since first weekend in May.”

Heiko Dobrikow, general manager of Riverside Hotel on Las Olas Blvd. in Fort Lauderdale, said that while the booking pace for the Fort Lauderdale Market in July is better than in June, it still lags well behind the previous year, when Fort Lauderdale’s July 4 occupancy rate was about 80%.

Travel itself remains severely depressed: While TSA check-ins, a proxy for the volume of travelers checking into airports, have gradually climbed, they remain at just one-quarter of the level for this time a year ago. According to the AHLA report, only 44% of Americans plan to take an overnight vacation in 2020.

That’s a problem for South Florida, where the vast majority of visitors arrive by air. In Miami-Dade, about two-thirds of of the 22 million visitors in 2018 arrived by plane.

The natural flow of South American travelers fleeing winter this time of year for Miami remains cut off, as travel there remains restricted, something that will likely hit local bottom lines. American travelers are still wary about traveling by air.

So, many who do end up visiting will likely arrive by car. STR says it is seeing a greater proportion of travelers driving to their destination, with some checking in the moment they arrive, without making an advance reservation.

That’s jibes with what Hilton’s Cole is seeing.

“Drive-able locations [or] stay-cations are [proving] popular, and with the summer heat and our beaches in Florida close, guests are looking at our hotel pools as a place to relax this weekend,” she said.

One of the beneficiaries of the usual July 4 traffic is Bayside Marketplace. But with this year’s Miami fireworks show canceled, restaurant owners like Rafael Wong are writing down most of the month.

“Normally, the fireworks show is a big deal. We have a packed house with a long wait time, and we do great on those days, so it would certainly have affected us,” he said.

In fact, Wong’s Los Ranchos Steakhouse has remained closed as it works with its landlord to renegotiate its lease.

Still, “one day out of year is not going to save what happened the last four months as a result of the pandemic,” he said. “It’s just not going make up for it.”

At a recent gathering of hotel sales and marketing managers, discussion focused on what appears to be a gradual return of visitors. That trend could be seen this past weekend in Wynwood, where tourists from states including Virginia, California and Hawaii braved blistering afternoon heat to take-in that neighborhood’s colorful graffiti.

“I don’t let it stop me,” Denzel Lee, who was on a 10-hour layover from Puerto Rico with his new wife, Lupita, said of the virus as he waited on line, masked, for a mojito on NW Second Avenue. “We had this time and figured we might as well go out.”

Talbert, of the tourism promotion agency, said there remains plenty to do around town, including Miami Spice, the restaurant-deals event that has been pushed up to July 4.

“We’ll get over this,” he said. “This is just day 106 of ‘Safer At Home’ “ —the name for Gov. Ron DeSantis’ virus response plan. “We’ve been through this for 15 weeks now — we know this is a pandemic. Safety first.”

Whatever uptick Miami hospitality businesses do enjoy this weekend, it will be a small lift on what still appears a lengthy road to recovery. STR now says it will take until 2023 for the number of room nights sold to rise to 2019 levels. Layoff notices from Miami-Dade hotels continue to come in; most recently, the Hyatt Regency Coral Gables announced it was making 106 furloughs into temporary layoffs without employment benefits.

In a recent interview, Carol Dover, president and chief executive of the Florida Restaurant and Lodging Association, said Friday’s announcement of a statewide ban on alcohol sales at bars was the right call.

“There have been way too many offenders,” she said, referring to those who violate social distancing and mask-wearing guidelines. “This is about personal responsibility. I’ve been to places myself that were wall to wall, everybody jammed up, and nobody wearing masks, nobody adhering to social distancing. ... Unfortunately, we’ve had way too many places that have just not been adhering to the guidelines.”

She praised the DeSantis administration for being pro-business and working with the business community, and put the blame for the rising case load on individuals flouting guidelines.

But Dover said any new restrictions should come with more state or federal assistance for an industry that has been uniquely devastated by the outbreak. While Paycheck Protection Program loans have helped some businesses, that have not proved a panacea.

“This can’t go on much longer — restaurants and hotels have got to get some help,” she said.