By Mary Hladky
COVID-19 has slammed the Wyndham Boca Raton.
“It is grim,” said general manager Phillip DiPonio. His average occupancy rate has plunged to 25%, “which clearly does not pay the bills.”
About one quarter of his staff has been laid off or furloughed. The bellman is gone. The shuttle service is on ice.
Nearly all his corporate business has canceled to the end of the year. Weddings are way down, and the couples who are booking have dramatically downsized their guest lists. International travelers have disappeared.
One recent bright spot was the arrival of parents bringing their children to start classes at Florida Atlantic and Lynn universities, boosting his occupancy to nearly 40%.
DiPonio has an advantage, though. His Wyndham franchise hotel at 1950 Glades Road is locally owned by Mitchell Robbins, who also is co-owner of the Farmer’s Table restaurant adjacent to the hotel. “I know our owner will sustain us,” he said.
His plight is shared by hoteliers across the county and country.
“Things are probably the worst for the hotel business in its history,” said Peter Ricci, director of FAU’s hospitality and tourism management program.
He expects a very slow recovery, with a return to a “reasonable” amount of business in 12-24 months. But a return to pre-pandemic occupancy, room rates, profit margins and staffing levels will take five to seven years, he says.
A June forecast by hospitality industry data firm STR and Tourism Economics was only a bit more optimistic, saying that U.S. hotel demand will not return to pre-pandemic levels until 2023, and average daily hotel rates will not fully recover in the next five years.
Roger Amidon, president of the Florida Restaurant and Lodging Association’s Palm Beach County chapter and general manager of the oceanfront Palm Beach Marriott resort on Singer Island, also said the hotel industry is in dire straits.
“We have been annihilated,” he said. “We have never seen anything like this. There is no light at the end of the tunnel as we see it now.”
The American Hotel and Lodging Association is pressing Congress to provide hotels with economic relief.
“It’s hard to overstate just how devastating the pandemic has been for the hotel industry,” AHLA president and CEO Chip Rogers said on July 29. “We have never seen a crisis of this magnitude.”
A July AHLA survey of hotel owners, operators and employees found that 87% of hotels laid off or furloughed staff because of the coronavirus pandemic and only 37% of hotels have been able to bring back at least half of their full-time employees.
On Aug. 18, the AHLA cited a national report that the hotel industry is facing a wave of foreclosures and the loss of tens of thousands of jobs.
Many Palm Beach County hotels temporarily closed in March when occupancy rates plunged and began reopening in May. Business picked up a bit until July when COVID-19 cases spiked, driving guests to cancel reservations.
Hotels were showing a very modest recovery in August.
Ricci said occupancy rates range from 10% to 40%, far less than the 70%-75% that is considered healthy.
Hotels are showing their best results on weekends. “The weekdays are miserable,” he said.
Oceanfront hotels were doing better than those inland, with a few hitting 70% occupancy on weekends, Amidon and other hoteliers said. Hotels that cater to leisure travelers had the edge over large conference hotels, Ricci said.
“The bottom line is there is slight improvement,” Ricci said. “But if we were to stay at this level even for another two months, I definitely think there would be more layoffs and foreclosures.”
As of late August, he and Amidon were unaware of any hotel foreclosures or bankruptcies in the county,
To keep their heads above water, hoteliers are reinventing the way they do business.
With business travel at a halt, international travelers scarce and many U.S. residents avoiding air travel, they are marketing to guests who live within driving distance to Palm Beach County.
They have slashed room rates and are emphasizing on their websites the steps they are taking to keep their hotels clean and sanitized so that guests will feel safe.
The lobby of DiPonio’s Wyndham Boca Raton was cleaned three or four times a day before the pandemic. Now, the cleaning is constant.
Guests want that and are paying attention to sanitation procedures, he said.
“People absolutely want to see the elevator buttons wiped down. They want to see we are all wearing masks,” he said.
Over the long term, he thinks the new procedures will become permanent. For example, his hotel now uses electrostatic disinfectant sprayers to kill any viruses in guest rooms and common areas. That protects both guests and hotel housekeepers, he said.
“We will get through this COVID thing,” he said. “Going forward, hotels will have things in place to keep guests safer” and even protect them from cold and flu viruses. “That is a wonderful thing for the future.”
The Aloft Delray Beach at 202 SE Fifth Ave., a Marriott franchise hotel, has no plans to throw in the towel, but its occupancy rate and revenues are way down.
‘It’s an unbelievably incredible impact,” owner Alan Mindel said of COVID-19. “It has wrecked our world.”
He too has laid off or furloughed staff, although some are now back at work. But since the hotel is not hosting banquets, he can’t bring back banquet staff, and he remains down four or five housekeepers, one front desk employee and some others. He is trying to give as many employees as possible enough work hours so they can make ends meet.
Before the pandemic, most of his guests were international or out-of-state; now they are mostly Floridians. Mindel is marketing to in-state residents and promoting his hotel’s cleaning and safety protocols, including electrostatic sprayers.
Weekday business remains low, but occupancy is back up to 30% to 40% on weekends.
One of the challenges is providing excellent service despite the difficulties. “We must maintain customer service at a high level,” he said. “The chef has a smaller captured audience and we want to make sure we impress each time.”
Mindel said his company, Samar 202 Florida LLC, has a partner who is well financed.
“We can weather it,” he said. Even so, “we could really use a vaccine by the end of the year. We could use a little more federal assistance.”
In the spring, Cathy Balestriere, general manager of privately owned Crane’s Beach House in Delray Beach, pivoted from the leisure market to extended-stay guests, which was possible because each of her 28 rooms has a kitchen. But she is constantly readjusting.
She too is now focusing on the drive market, and her occupancy rate was about 40% to 50% on weekends in late August. But when COVID-19 cases spiked in July, the cancellations rolled in.
Her hotel at 82 Gleason St. is a short distance from the beach, which is attractive to guests. She is offering a “7-night getaway” at reduced rates aimed at people desperate to get out of their houses.
“Stay at Crane’s. Stock up the fridge. It is like having your own beach house at Crane’s. You don’t have to be concerned about exposing yourself by dining out every night,” she said of her message to potential guests.
She has not laid off staff, but has trimmed costs and adjusted duties to keep them working. For example, she stopped using a landscaping company and instead is having some of her employees do that work.
Having a robust safety and sanitation program is essential because guests demand it. “People are being very careful and cautious,” she said.
Nick Gold, public relations director for the Eau Palm Beach in Manalapan, did not provide an occupancy number except to say, “It certainly is not where it was last year at this time.”
The oceanside resort temporarily closed in March but continued to pay salaries and provide health insurance for three months. It has since cut almost 50% of its staff.
The resort reopened on July 1 in anticipation of strong demand for the July Fourth weekend. But the county closed beaches, dealing a blow to many hoteliers. Since the beaches opened, “we see guests returning,” he said.
The resort’s conference business is at a halt but couples are beginning to book weddings, albeit small ones. Guests are mainly South Floridians who drive to the resort for staycations.
“They feel it is time for a break and to have a change of scenery from being at home,” Gold said.
The Eau Palm Beach has launched a “Stay Safe Program” that affects every part of the resort’s operations. The detailed list, and videos, on its website explain contact-free check-in, social distancing measures, linen cleaning procedures, electrostatic sprayers and UV light technology to disinfect everything from luggage carts to the air, and new seating layouts at restaurants.
“It is all about making the guest feel safe and comfortable in the new world we are living in,” Gold said.
Guest surveys show they appreciate the changes. “They say, we really appreciate you’re taking this seriously and we feel good about being here,” he said.