'It's heartbreaking': Hotel operators grapple with financial losses during coronavirus pandemic
It's not just a business at stake for Bob Brooks; it's his livelihood.
In the last two weeks, Brooks' business, Fort Myers' Hibiscus House Bed & Breakfast, has seen 62 canceled reservations.
"You have to think, at a small, five-bedroom place like mine, 62 reservations being canceled out, that hurts," he said. "We're definitely struggling."
And Brooks' situation is no different than that of many others in the hotel industry who are fighting to stay afloat at a time when Americans are encouraged to stay home.
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The hotel industry is largely supported by those who travel, an activity that has been severely restricted in recent weeks due to the rapid spread of the novel coronavirus in the U.S.
The U.S. has limited travel by closing its Mexican and Canadian borders and restricted travel from multiple European countries. The U.S. Department of State is also advising all Americans to cease international travel during the pandemic, and some states throughout the U.S. are encouraging residents to avoid all nonessential travel.
According to Chip Rogers, the CEO of the American Hotel & Lodging Association, the current situation for the hotel industry is worse than post-9/11 and the Great Recession combined. He said that those two instances led to about 10% declines in hotel occupancy. In the current pandemic, hotels are seeing declines of 80% and 90%, he said.
"What they're having to decide now is do they use the little cash they have left to continue to pay their mortgage, or do they simply give up and hand the keys to the bank," he said.
According to an Oxford Economics study, 88,631 direct hotel operations jobs in Florida have been lost as a result of the pandemic as of mid-March. Additionally, the data shows that 305,146 hotel-supported jobs have been lost in the state as of mid-March.
Rogers said that his organization estimates that 70% to 75% of all hotel employees in the U.S. have already been furloughed or let go.
"The reverberations are deep," he said. "It's going to be felt."
And the longer the country is struggling in the fight against the virus, the longer it will take for the hotel industry to recover, Rogers said.
"It's devastating for the industry," he said. "The longer this goes on, (employees) will have to move on to something else and move out of our industry. So when travel does resume, it's going to make it even more difficult for these hotels to open their doors again. Time is of the essence."
Rogers stressed the importance of the $2 trillion stimulus package that will provide cash directly to American families and assistance to businesses throughout the country. The Senate approved the package Wednesday after lengthy debates.
In particular, Rogers touted the section that allows for businesses with 500 or less employees to borrow up to $10 million in small business loans, which can be forgiven.
"Without that, you'll see a lot of hotels go out of business, and they'll never be open again," he said.
Local hotel operators reel from loss of revenue, workforce
For Brooks, continuing cancellations at his bed and breakfast have meant going from a potential revenue stream of $25,000 per month down to around $9,000 per month.
"We're starting to see it trickle into late April and May when people are cancelling," he said. "We're definitely feeling the hurt."
During a time when Brooks' bed and breakfast is usually 100% occupied by guests, the small business has gone to about 20% occupancy in recent days, and that number is continuously dropping.
For now, Brooks said it's a matter of taking a hard look at bills, researching possible loans and looking for support from creditors and deferrals on mortgages.
Brooks noted that his wife, Colleen, took a human resources position with the Fort Myers Beach Fire Department in August, which has helped to pay the family's bills while they're currently getting "zero" from the bed and breakfast.
"Thank God she decided to do that or we'd be completely sunk," he said. "We're getting by, but we just have to pick and choose what we spend money on."
While Brooks is "hoping" that the business can bounce back quickly after the pandemic, he's skeptical that this can occur.
The bed and breakfast is losing business in the time of year when they stand to make the most money, and the upcoming fall months — when travel may resume as normal — are when business is usually slower.
"We're getting into our lower season," he said. "It's going to take us a bit to pull out in stride."
And it's not just small hotels that are feeling the pressure from the pandemic.
Daryl Rixman is the general manager of the Hotel Indigo in downtown Fort Myers and had to watch 23 of his employees lose their jobs last week.
"It's heartbreaking, gut-wrenching," he said. "It's very, very stressful, and it's impacting peoples' lives and their livelihoods."
The guest cancellations at the nine-floor, 67-room hotel "just continue to roll in," he said.
Rixman estimates the hotel has lost $250,000 in the month of March based on previous years' March revenue and what the establishment was projected to make this month.
"And that's conservative," he said. "It's probably actually a little bit more. We're in season, and it's pretty empty."
He also said he's seen about $300,000 lost from people canceling reservations that were previously booked for upcoming weeks.
Rixman still sees check-ins from some business travelers, construction workers, IT workers and people checking in on their Southwest Florida rental properties, but for the most part, occupancy is very low.
He said, however, that he believes the hotel will bounce back in "a very strong way," citing a possible "pent-up demand" to travel from those who are staying in their homes during the pandemic.
"People are going to be going a little stir-crazy," he said. "So once the green light has been given and the world's gone to a new normal, people will want to get out and travel. I suspect we'll see a lot of people."
While many hotels like the Indigo are treading water, others have opted to close down entirely in the face of the pandemic.
The Naples Beach Hotel, for example, is closing this Thursday and will not reopen until April 24, according to a statement on the hotel's website. The closure is being made to "ensure the safety and well-being of our guests and staff during the COVID-19/coronavirus outbreak," the statement reads.
The statement's author, Naples Beach Hotel General Manager Jason Parsons, did not respond to requests for comment.
Jack Wert, the executive director of the Naples, Marco Island and Everglades Convention and Visitors Bureau, said that Collier County has certainly seen a decline in hotel occupancy and large amounts of cancellations in the past several days. However, he said that it's too early to provide exact tourism and occupancy numbers.
Francesca Donlan, the communications director with the Lee County Visitor & Convention Bureau, also said that the situation is "too fluid" to get a handle on the current economic impact.
"The tough answer is it's going to be very impactful to our hotels, the smaller ones especially," Wert said. "A lot of those are mom and pop places, and they depend on visitors. So they're definitely going to be hit hard."
Reach Andrew Wigdor at email@example.com and on Twitter @andrew_wigdor