Miami-Dade hotel occupancy plunges to 19.6 percent. Monroe County down to 7.2 percent
Hotel occupancy in South Florida plummeted to new lows last week following closures and restrictions due to the coronavirus outbreak.
In Miami-Dade County, occupancy was at 19.6 percent from March 22-28 compared to 86.6 percent during the same week in 2019 — a slide of 77.4 percent, according to the latest STR report, which provides analytics for global hospitality sectors. It was the first report showing the full impact of hotel shutdowns.
Broward County hotels were at 24.1 percent occupancy compared to 86.3 percent last year — a drop of 72.1 percent. Palm Beach County was at 21.2 percent compared to 84.2 percent last year.
The region’s steepest decline was in Monroe County, where just 7.2 percent of the hotel rooms were occupied in contrast to 92.1 percent the same week last year. The Keys officially were closed to visitors on March 22.
A total of 26,500 Monroe County workers are employed in tourism-related jobs, according to Andy Newman, media relations director for the Keys Tourism Development Council. He has been working for 40 years doing public relations for the Keys, and says he never envisioned the current situation.
“I’m 64 years old, and I’ve never seen anything like this in my lifetime,” Newman said. “I’ve been through, especially with the Keys, a number of difference crises. Hurricanes, oil spills, and I really thought before coronavirus that I had seen everything ... but here we are, with the Florida Keys cut off to leisure travelers in peak season, which usually runs through Easter weekend.”
The dismal results were widely expected in the wake of the shutdown.
“I feel those numbers,” said Chris Rollins, CEO of The South Beach Group Hotels, which includes 17 boutique properties. All of the company’s hotels are closed, and 900 employees are furloughed. Only a skeleton staff is at work, cleaning, painting and doing maintenance.
Rollins and his management team are providing 600 weekly care packages for their staff as a token of appreciation during the crisis — boxes filled with pasta, sauces, fruit, vegetables and other food items they ordered from their vendors. They had six pallets of supplies delivered the past two weeks that management boxed up; they plan to keep doing it every week. Managers are dropping off boxes for employees who can’t make it to the hotels to pick them up.
“It was an emotional, tear-jerking moment,” Rollins said. “Last week was payday, so we told the employees to come get their paychecks and when they got there, we gave them a box of supplies and food to say, ‘Thank you.’ Believe it or not, everyone does understand. They know it’s not personal. You didn’t get furloughed because we didn’t like you. This is a world crisis. They are happy to stay home and get this thing over.”
Prior to the COVID-19 pandemic, roughly 150,000 South Florida workers were employed in the hospitality sector, which does not include airlines or the cruise industry. National unemployment numbers due for release Thursday are expected to show a record number of applications beyond last week’s record 3.3 million. But Florida’s own numbers — last week at 74,000 — may not yet show the full extent because the state’s claims website is not functioning properly.
Last week’s occupancy drop is at “unprecedented levels — worse than those seen during 9/11 and the financial crisis,” said Jan Freitag, the STR’s senior vice president of lodging insights via a release.
For the week of March 22-28, the U.S. hotel occupancy is at 22.6 percent, down from 69.4 percent the same week in 2019. Seven of every 10 hotel rooms in the country were empty.
“That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further,” said Freitag. “With most events canceled around the nation, group occupancy was down to one percent with a year-over-year RevPAR decline of 96.6 percent. The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome.”
Due to the impact from the pandemic, the U.S. hotel industry is projecting a 50.6 percent decline in revenue per available room (RevPAR) in 2020, according to a special forecast revision from STR and Tourism Economics.
“The industry was already set for a non-growth year. Now throw in this ultimate ‘black swan’ event, and we’re set to see occupancy drop to an unprecedented low,” Freitag said. “Our historical database extends back to 1987, and the worst we have ever seen for absolute occupancy was 54.6 percent during the financial crisis in 2009.”
Adam Sacks, president of Tourism Economics, predicted a rebound once the number of coronavirus cases diminishes. “Travel has come to a virtual standstill, but we expect the market to begin to regain its footing this summer,” he said. “Once travel resumes, the combination of pent-up travel demand and federal aid will help fuel the recovery as we move into the latter part of this year and next year.”
At South Beach Hotels, Rollins said management has been working feverishly to apply for aid through the federal CARES Act legislation that was ratified last week. He also has been working with city officials on a strategy for reopening, whenever that date may be.
“We are communicating with our employees, letting them know that we are working on applying for those loans so we can bring staff back,” Rollins said. “We can’t wait. Our staff tells us, ‘We’re here as soon as the green light comes on, we are ready to come back to work.’ And we’re ready to open again. We had to close, we’ll bite that bullet, but let’s plan the next step.”
Newman is preparing for the day the Keys can reopen to travelers. Although “this is not my first rodeo,” he said this crisis will present different challenges than post-hurricane recovery.
“One thing we absolutely, positively know about Florida is that physically, the destination is perfect, there is not a twig down because of coronavirus,” Newman said. “To me, one concern is how long can industry service workers stay in the communities that have higher-than-average living expenses? Also, we will have to rely a lot on South Florida mainland visitors. Even though there will be pent-up demand, European and UK travelers are probably done this year, and they make up a significant segment of our business. Travel restrictions will continue to hurt us.”
This story was originally published April 1, 2020 at 4:12 PM.