Summer slowdown? Why Southwest Florida's hotels could see less business than last year

Laura Layden
Marco Eagle
A pool area at JW Marriott Marco Island Beach Resort in this file photo. Three Marco Island hotels and the island itself have been nominated in the 2020 Condé Nast Traveler awards competition.

Summer might not be as sunny as last year for Southwest Florida's tourism industry.

For many hoteliers, the outlook isn't as bright for various reasons, from higher gas prices to inflation.

The bar is also high.

The industry experienced a particularly strong summer last year, in part due to "revenge travel," as Americans looked to make up for the trips and vacations they lost out on in 2020, due to COVID-related travel restrictions and concerns.

Revenge travel could be waning.

After a strong start to 2022, occupancy rates dropped unexpectedly in April.

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In Collier County, occupancy fell by 8.2% to 66.3%, down from 72.2% last year, according to a report by research consultant Downs & St. Germain.

Paul Beirnes, the county's tourism director, looked at the dip as a good indicator of a "change on the horizon."

He described it as "a crack in the paint" at the Tourist Development Council's meeting in May.

"It is absolutely nothing to be concerned about since we are still ahead of last year‘s record-setting pace," Beirnes said in an email. "The purpose in me raising the caution level is just to make sure those in the industry do not become complacent and let their guard down, after such a long period of elevated and unprecedented growth."

While Lee County gets quarterly tourism reports, rather than monthly ones, it uses the same research consultant.

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Joseph St. Germain, president of Downs & St. Germain, shared that Lee saw similar trends to Collier in April, and so did all of the other destinations in their competitive set on Florida's Gulf coast. 

Statistics for May won't be shared in detail with Collier's Tourist Development Council until Monday. However, Beirnes said in a phone interview that they'll once again show a drop in occupancy over the year.

Maddie Buysse reads a book on Friday, June 17, 2022 at the Hyatt Residence Club's Pelican Landing in Bonita Springs, Fla.

Clouds ahead?

There are other indications of a slowdown. In a survey at the end of May, 79% of Collier's hoteliers projected their bookings for June, July and August to be down over last year.

Most of Collier County — is considered an expensive place to visit.

Lee is seen as a bit more budget-friendly.

In 2020 and 2021, Southwest Florida saw more in-state visitors than usual, with many Florida residents choosing to travel closer to home and to less crowded, open spots, due to COVID. 

Anticipating some weakness there, with the easing of COVID travel restrictions and concerns, Collier County's tourism bureau has doubled down on its marketing and advertising efforts to "drive markets" in Florida and the Southeast, Beirnes said.

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"All of the metrics are showing they are responding," he said. "Proof will be in the pudding as the summer goes on, but I think we will be fine."

In April, Collier saw 35,200 in-state visitors. That compared to 68,200 a year ago — nearly twice as many.

From January through March, both Collier and Lee saw more visitors, more room nights booked and more spending than in the same months last year, according to Downs & St. Germain Research.

That's before U.S. inflation hit a new 40-year high in May.

A year ago, no one could have predicted the many variables influencing the decision to travel this summer, including Russia's war in Ukraine, a volatile stock market, higher fuel and transportation costs — and, of course, inflation, which has seemingly driven up the price of everything.

Then there are the headaches and heartbreaks of the thousands of canceled flights of late —  which airlines have blamed on pilot shortages and bad weather. And rental car shortages.

Even without all those variables, the exuberance in leisure travel — or travel for fun and relaxation — that started early on in the industry's recovery from the COVID pandemic wasn't sustainable, Beirnes said.

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"This winter the occupancy was so high. The rates were so high. Normalization will happen," he said.

He pointed to a recent survey by Longwoods International, in which 41% of American travelers said record-high gas prices would "greatly impact their decisions to travel in the next six months," up from 32% in May.

Additionally, 36% of travelers reported higher fuel costs and airline ticket prices would "reduce their likelihood of booking air travel for the rest of this year."

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Help or hindrance?

Nationally, the average price of gas is still hovering near $5 a gallon.

Lee County Commissioner Cecil Pendergrass, chairman of the county's Tourist Development Council, said the region could actually benefit from the higher fuel prices this summer — at least in a way.

"We may see more ‘staycations’ from Florida residents," he said, with more people traveling closer to home to cut down on transportation expenses, or to avoid the hassle and uncertainty of canceled or changed flights.

In an email, Robert Boykin, CEO and chairman of Boykin Management Co., which oversees the Pink Shell Beach Resort on Fort Myers Beach, said "as summer ripens" he wouldn't be surprised to see shorter stays and weaker business mid-week for myriad reasons.

"We are just starting to see demand wobble," he said. "We have gotten our room rates up just to cover the inflated costs of labor and supplies, so we are trying to balance a lot of issues."

Looking ahead, Boykin said there's a lot of uncertainty.

"If history is any guide then it seems to reason that we cannot avoid recessionary impacts. We are hoping it will be minimal, but this is all uncharted waters for now," he said.

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He has his fingers crossed, as every summer is "an adventure," he said, especially given the threat of hurricanes in the tropics.

"Even the threat that doesn’t land has an impact, so there are many variables out there this year," Boykin said.

Despite the many challenges facing travelers, some area hotel managers are more optimistic about their summer business this year. That includes Brian Kramer, with the Hyatt Coconut Point Resort & Spa in Bonita Springs.

"Travel has returned and we are seeing more and more people coming to Florida, as well as Floridians staying in Florida for their vacation plans," he said via email. "We are poised to have a very busy summer season." 

Overall, he said, mainland resorts like his should continue to see strong demand as Americans are still unsure about overseas travel and other vacation options, such as cruises. 

Southwest Florida can be a great escape, even if for a short while, from the craziness of the last few years, with its white-sand beaches and warm, calm waters, Kramer said.

"We are grateful to be in such a beautiful part of the country and to have the support of the community to keep moving forward," he said.