South Florida hotels hurting more than anywhere else as COVID-19 pandemic continues
The travel industry is projected to lose 8 million jobs by the end of April — a third of all the jobs lost in the United States, according to a new Oxford Economics study released by the U.S. Travel Association and the analytics firm Tourism Economics.
The report concludes that the total impact from COVID-19, a loss of $519 billion in travel spending by the end of year, is nine times greater than the impact following the 9/11 terrorist attacks. A decline of 81% in revenue is expected over April and May, with continued losses the rest of the year.
The plummet is being felt acutely by Miami’s hospitality and tourism industry. That includes cruise lines, hotels, airport concessionaires and the many smaller businesses that depend on travelers. Among the Top 25 tourism markets in the nation, Miami/Hialeah posted the largest decline in Average Daily Rate for the week ending April 18 — a 56.8 percent drop to $101.51 from the same week last year, according to data from STR, an industry tracking firm.
Monroe County recorded a 7.6 percent hotel occupancy from Apr. 12-18, which is 91.6 percent lower than a year ago. The revenue per available room was $11.91, a severe 96.2 percent drop from a year ago.
Workers are suffering, and just a fraction of those who have lost their jobs have received unemployment benefits.
The South Florida tourism sector’s playbook written after previous crises — Hurricane Andrew, 9/11, the Great Recession and the 2016 Zika outbreak — only goes so far.
After more than a month of complete closure, Miami-Dade Mayor Carlos Gimenez is preparing to open the county’s open spaces like parks, golf courses and marinas in the next week, with social distancing enforcement. But the future of Miami-Dade’s signature industry is still uncertain, said panelists Wednesday at a webinar hosted by the Beacon Council.
Miami International Airport passenger traffic has dropped 90% since March, according to Mayor Carlos Gimenez. Around 75% of hotel hourly workers have lost their jobs, according to Wendy Kallergis, CEO of the Greater Miami and the Beaches Hotel Association.
“Our community has the ingenuity, the drive, the talent to make a comeback,” said Gimenez. “The hospitality and tourism industry has been hit especially hard, so this sector is at the forefront of our recovery work.”
Nationwide, the hotel industry continues to report significant declines in occupancy and revenue per available room (RevPAR). During the week of Apr. 12-18, national occupancy dropped 64.4 percent to 23.4 percent from the same week a year ago. Revenue per available room plummeted 79.4 percent to $17.43.
“There was not much of a change from last week. As we’ve noted, RevPAR declines of this severity are our temporary new normal,” Jan Freitag, STR’s senior VP of lodging insights, said in a release. “Several weeks of data also point to occupancy in the 20 percent range to be the low point.”
South Florida hotels are suffering a bigger occupancy drop than the national average because April typically is still considered high season.
In Miami-Dade, occupancy from Apr. 12-18 was 20.3 percent, which is 75.4 percent lower than the same week last year. The RevPAR was at $20.59, an 89.3 percent slide from last April. In Broward, occupancy was at 22.5 percent, a 72.1 percent drop from the previous year same week. The RevPAR was at $19.66, an 85.7 percent drop from last year.
Kallergis said the industry is already considering protective measures, such as glass protectors at hotel check-in desks. Elevators and restaurant tables may be limited to just two people at a time, she said.
Beaches — a key tourist magnet — are still closed. A plan for reopening them is still being developed, said Gimenez, but it likely will be a gradual process, he said.
“We’ve got to find a way to open the beaches again, because they’re kind of linked with Miami Beach and all,” Gimenez said. “There’s no reason to close beaches in stretches of Florida where you don’t have massive throngs of people descending on the beach... Here it’s different.”
According to the Oxford Economics study, international visitors to the United States likely will decline 54 percent, assuming partial opening of the borders in the second half of the year. An estimated 43 million fewer international travelers will visit, with the largest declines from Europe (68 percent), Asia (63 percent) and Latin America (61 percent).
An estimated $80 billion in taxes will be lost as a result of travel declines this year. Even using a “flattening the curve” model with a gradual restart of travel beginning in June, the cumulative industry decline would be $401 billion.
“The CARES Act was a good start, but the data shows there is still extreme and mounting pain in the American travel industry,” said U.S. Travel Association President and CEO Roger Dow, responding to the Oxford study via release. “We’re appealing for fixes, the addition of more relief, faster rules, and greater flexibility.”
Paycheck Protection Program funds from the federal government have already been depleted and are in urgent need of replenishment, Dow said. The Senate already has approved an expansion, and the House of Representatives is expected to vote Thursday.
April job losses in the travel sector included 2.75 million in food services, 1.1 million in recreation and amusement, 1 million in lodging, 374,000 in air transportation, 448,000 in other transportation, 349,000 in tourism-related retail and 96,000 in travel planning.
“The relief program needs to fit the crisis, and we’re still learning the magnitude and intricacies of this particular crisis,” Dow said.
A year-over-year analysis by Oxford Economics’ Tourism Economics division showed that overall travel spending the first week of April plunged to $2.9 billion — an 85 percent drop since the first week of March and 87 percent lower than the same week in 2019.
As state tourism officials consider strategies for getting business going again, their first priority will be to target Floridians.
“Given that Floridians will be in the best position to immediately travel in Florida, people that live in our state will be incredibly important in restarting Florida’s tourism industry,” said Tampa’s Dana Young, the President and CEO of Visit Florida, the state’s official tourism marketing corporation.
This story was originally published April 22, 2020 at 6:31 PM.