The developer will begin construction on Cape Coral Commons later this month
Coronavirus pandemic shutters hotels across Southwest Florida despite essential status
Though hotels and resorts are essential businesses under Florida's safer-at-home order issued by Gov. Ron DeSantis last week, dozens have closed in the Naples area, and more are likely to shutter over the coming weeks.
Some hoteliers in the region interpreted the governor's executive order to mean they can't or shouldn't take reservations, while others shut down because business has been so slow – because of coronavirus-related travel restrictions and safety concerns – that it no longer makes economic sense to keep the doors open.
Jack Wert, Collier County's tourism director, has tried to stay on top of the closures in his backyard, stretching from Naples to Marco Island and the Everglades. By Wednesday, his count had grown to 24, and an additional eight properties were likely to stop operating soon, he said.
Many hotels have furloughed or laid off much of their staff, so they don't have the resources to handle reservations even if they got any, Wert said.
"So," he said, "they are just kind of hanging on."
Some of Collier County's most well-known resorts have closed, including both Ritz-Carltons and the Naples Beach Hotel.
The Naples Bay Resort is "closed for regular business but maintaining 24-hour staff coverage," said John Reilly, general manager.
"Our intent is to be ready and able to accommodate first responders if required," he said.
Usually, hotels are hopping this time of year in Southwest Florida, especially for Easter weekend, but the pandemic cut the busy season short.
The Naples Beach Hotel shut down March 26, planning a reopening date of April 24.
"It is unprecedented," Wert said. "I don't think we've ever experienced, at least since I've been here, this kind of slowdown in business."
The average daily occupancy at the county's hotels, motels and resorts, he said, has been less than 10%.
On Marco Island, the JW Marriott beach resort is down to operating one tower for its guests.
"Though our normal occupancy rarely permits this, it is our protocol to consolidate into one of our three towers when the resort’s occupancy is low. And occupancy is certainly low right now – below 5%," Amanda Cox, the resort's director of sales and marketing, said in an email this week.
Though the resort continues to take reservations, they're few and far between.
Though the resort continues to take reservations, they're few and far between.
Rates may be the same, but the resort's operations changed dramatically after it implemented many procedures and rules to protect its guests.
"Our amenities and offerings have been updated to reflect the guidance of the CDC, the World Health Organization and our local health authorities. For example, our only food and beverage options at present are 'to-go' options that a guest could enjoy in their hotel room," Cox said.
On March 20, Gov. DeSantis ordered all bars and restaurants to close in the state, allowing only pickup and delivery, which affected hotels.
Though management at several hotels in the Naples area have shown interest in housing health care workers battling COVID-19, Wert said he knows of none actually doing it.
The coronavirus forced hotels and resorts to close in Lee County, but putting a number on the situation is more difficult.
Francesca Donlan, communication director for the county's tourism bureau, said there's "no mechanism to know who is open and who is closed at this point for a total number."
She said she's aware of a handful of closures, especially on Fort Myers Beach, Sanibel and Captiva.
On March 27, the Sanibel City Council adopted a 28-day ban on accommodations of any kind on the island as part of an effort to prevent the spread of the coronavirus. That ban will run through April 24.
According to its website, the ’Tween Waters Island Resort & Spa on Captiva closed voluntarily March 29, "following federal, state and local coronavirus health and safety guidelines. The resort plans to reopen May 1, coinciding with the expiration of the governor's "safer-at-home" order.
Even before the governor's latest executive order, the South Seas Island Resort on Captiva had restricted any new arrivals through May 31. On April 2, it canceled all reservations for the month "to comply with the order," according to its website.
In a pop-up message on its website, the Lani Kai Island Resort on Fort Myers Beach says it's unable to accept any reservations with booking dates through June 26, based on the town of Fort Myers Beach's emergency order.
"Now is NOT the time for destination traveling; please remain at home and safe until this passes. We hope to see you once all is clear again," the post says.
On March 30, the Fort Myers Beach Town Council voted to prohibit all hotel and vacation rentals for 90 days, along with urging residents to stay at home unless they need medical care, food or other essentials, such as prescriptions.
The order shut down beach resorts such as the Pink Shell overseen by Boykin Management. The management company has closed all of the hotels it operates during the crisis, said Robert Boykin, CEO and chairman.
"We have minimal staff there to perform property oversight and to provide security," he said. "In the meantime, our management team is already working on reopening strategies geared to different volumes."
One hotelier has found creative ways to keep her business running, allowing her to keep many of her employees.
Mary Brandt, owner of Hotel Escalante in downtown Naples, said she thought about renting her empty rooms to health care workers but came up with another plan. She cut rates at her boutique hotel, which has just 10 rooms, and she offers them up to seniors looking for a safe haven.
"We've had a lot of people who have called us, from the East Coast, like New York, who wanted rooms, which we didn't allow," Brandt said. "We are only looking for seniors in Southwest Florida, up to Sarasota, but primarily in Collier County."
The hotel is a perfect spot for seniors, she said, because rooms are spread apart and it can provide them with breakfast, lunch and dinner, making it easier and more comfortable for them to shelter in place safely without having to go out for basic essentials.
"If my parents weren't safe in their country house in Georgia, this is exactly where I would want them to be," Brandt said.
Under the new marketing initiative, launched last week, she hopes to generate enough business to keep her crew of hotel employees on the payroll.
A few weeks ago, Brandt let her entire restaurant staff go after the governor forced dining rooms to close, but she's found a way to bring them back, through a new partnership with French bakers Yannick and Ana Brendel. The Brendels, who are well-known in Naples, make breads, pastries, quiches and more from the hotel's kitchen for pickup and delivery.
The bakery – dubbed Bakery E – serves first responders, from firefighters to nurses to police officers, through a "Bake it 4Ward" campaign, delivering them free pastries and other fresh-baked goodies funded by a percentage of its sales.
"By creating this pop-up bakery, we solve the problem of Mary not having to let go of all her employees, while supporting the Naples community with our craft baked goods," Yannick said in an email. "It’s during times of crisis, with the will and perseverance of wanting to help, that beautiful things emerge."
To prop up her business and support employees, Brandt reopened her fine-dining restaurant, Veranda E, selling meals-to-go to the community for pickup and delivery.
Numbers don't lie
The hotel data isn't good, and it's likely to get even worse.
Lee County's visitors bureau has been tracking trends in occupancy and rates weekly, through reports it gets from tourism research firm STR.
The statistics for March 22-28 showed hotel occupancy in the county at only 21%, down nearly 74% from the same time a year ago. Likewise, the daily rate – at $129.50 – fell more than 48% over the year, and revenue per available room declined more than 86%.
More recent STR statistics for Collier County are more grim. For the week of March 29-April 4, occupancy stood at 9.9%, down nearly 87% from last year. The average daily rate fell to $141.52, dropping nearly 53% from last year, while revenue per available room declined nearly 94%
Though the cutbacks and closures at hotels are likely to be temporary, their impact on the economy is huge. Tourism is a lifeblood industry in Southwest Florida, where tens of thousands of jobs are supported by visitor spending.
The federal Worker Adjustment and Retraining Notification (WARN) Act requires most companies laying off at least 50 employees during a 30-day period to provide a 60-day advance notice in writing to their workers and communities, as well as the state. Notice to the state triggers assistance to affected employees with unemployment claims and reemployment.
However, these are unusual times, so different rules may apply.
Asked why more WARN notices haven't been filed in Florida, Paige Landrum, press secretary for the Florida Department of Economic Opportunity, said in an email, "If a business is closing due to a natural disaster or unforeseeable business circumstances, the 60-day notice requirement is waived. Notice should be provided as soon as practicable in these circumstances."
Marta Moakley, a Florida lawyer and XpertHR legal editor, said the WARN Act doesn't apply to smaller businesses in the state and employers normally covered by the act may meet the unforeseen business circumstances exception.
"An employer could argue that the far-reaching and sudden consequences of the COVID-19 pandemic could not have been foreseen and were 'sudden and dramatic,' as well as beyond the employer’s control," she said.
"Notably, there is a similar exception for natural disasters," Moakley said.
Resorts and hotels in other areas of the state, including Miami, Orlando. St. Petersburg, Sarasota and the Keys, filed hundreds of WARN notices of layoffs.
Alsco, which provides linens and uniforms to the hospitality industry, filed multiple WARN notices for branches across the state, including one in Naples, where it reported 24 layoffs.
In an email sent to the city of Naples and the state, Bob Chronister, a regional human resources manager for Alsco, headquartered in Utah, said there were hopes of bringing the employees back within six months.
"There are numerous government and health directives impacting our business and making it impossible to continue operations for the time being," he wrote. "The speed and vast impact of the coronavirus is unprecedented."
Taking a hit
According to weekly data that the U.S. Travel Association commissioned from Oxford Economics, Florida saw $262 million in traveler spending for the week ending March 28, $1.8 billion less than it did at the same time last year.
The study shows there are 747,705 jobs supported by the hotel industry in the state and 336,467 of those have been or will be lost in the coming weeks.
As of April 8, nearly 8 out of 10 hotel rooms sat empty across the country, according to STR.
Nationwide, the American Hotel and Lodging Association reports:
- Hotels have lost more than $10 billion in room revenue.
- Based on their reported rates, hotels are on pace to lose more than $500 million in room revenue per day.
- Most hoteliers project revenue losses of more than 50% for the first half of the year.
- Nearly 3.9 million hotel-related jobs have either been eliminated or will be wiped out in the coming weeks.
California is likely to see the most job losses, including more than 125,000 hotel jobs and more than 414,000 related jobs.
Kent Schwarz, a hotel veteran and executive managing director for Colliers International Hotels, said Florida hoteliers are well-suited to weather the COVID-19 storm since they've dealt with many disasters over the decades, including destructive hurricanes.
He predicted tourism will bounce back quicker than in other parts of the country. Hotel layoffs, furloughs and closures haven't been as bad in Florida as they've been in some other markets, such as California, New York and New Orleans, Schwarz pointed out.
Schwarz expects to see many hotels in Florida and elsewhere struggle to make their mortgage payments over the coming months. The good news? He anticipates lenders will be more patient than they were during the last recession, as they look to avoid foreclosure actions.
"Many special servicers remember the challenges with taking hotels back in the last recession, so they’d love to avoid that this time," Schwarz said.
During the crisis, he said, hotel deals have been put on pause as buyers and sellers are in a "wait-and-see" mode.
The coronavirus outbreak could encourage more hoteliers to deploy technology that limits the interaction between their employees and guests, such as smartphone apps that allow mobile check-in and keyless room entry, which some large chains have already tested and introduced, Schwarz said.
"If one company has all these bells and whistles, then the other company will feel that they not only need to do that but surpass that," Schwarz said.
The coronavirus pandemic could have other long-term effects on the tourism industry, including derailing or delaying the construction of resorts and hotels around the country.
Citing STR data, Schwarz said there are many more new hotels planned in Lee County than in Collier and Charlotte counties – and some could falter.
"Those hotels that are under construction will probably get built," he said. "However, a real good example of not getting built, at least for the time being, is Allegiant Air's Sunseeker Resort in Port Charlotte, put on hold. "
Southwest Florida has seen a surge in hotel development over the past few years, and many projects are built or close to completion, including one for medical device manufacturer Arthrex in North Naples that will house its many out-of-town visitors.
In Collier, there are a handful of hotel projects in various stages of planning and permitting, Wert noted.
"They will most likely be delayed," he said.
The Old Naples Hotel, a redevelopment project planned by Anne and Charles Camalier, is moving forward, but final approvals will be delayed because of the pandemic.
In a statement, Anne Camalier said the Naples Design Review Board hearing on the project's final architectural design was moved at the city's request from April 22 to May 27.
"That hearing is one of several necessary steps required before we can move into demolition and construction," she said. "However, despite these delays, we remain committed to bringing this luxury property to Naples and will continue adjusting our timeline in response to this highly volatile situation. Our thoughts and prayers go out to all who are suffering through it.”
Likewise, Kim Richards, CEO of the Athens Group based in Arizona, said his company's redevelopment plans for the Naples Beach Hotel are still advancing, and safety is a top priority.
“First and foremost, our thoughts and prayers go out to our friends and neighbors in Naples. We hope that everyone is staying safe, and those who may have been impacted by the coronavirus recover quickly," he said in a statement.
He said the crisis has "impacted all of us."
"We have adapted our operations to ensure the team’s health and safety, while continuing to advance the project without any significant delays in our pre-development activities," Richards said.