Editor’s note: This article is the final in a series of articles focusing on South Florida’s transformation from a highly seasonal resort destination catering primarily to American tourists to a world-class destination with year-round draw. Earlier articles discussed the transformation of the three Eastern destinations – Miami Beach, Fort Lauderdale and Palm Beach.
“It’s different over here” was the phrase most often used by the selection of hotel sales-and-marketing people interviewed for this segment of the series about the transformation of the south Florida hotel market.
Indeed there is a different feel to the southwest Florida area of the state, especially when compared with the higher-profile resort markets on the east coast of Florida. Many residents and visitors will tell you that they are happy about that difference. But they also will say they are a bit wary of the rapid growth that has occurred over the last 20-plus years since four-lane Interstate 75 replaced the two-lane State Road 84 across the Everglades to become the “new” Alligator Alley in 1992.
Prior to that year, a trip across the Everglades from Naples to Miami/Fort Lauderdale was a time-consuming and dangerous adventure on the undivided, single-lane road. Given the straight nature of the highway—virtually an 80-mile beeline from east to west—high-speed head-on accidents were frequent. In those pre-cellphone days, car trouble or an accident meant waiting until someone driving by noticed you and then reported it to the toll taker on the opposite site—which might be another hour’s drive away. And the term “Alligator Alley” was not merely a nickname, since the old road ran at grade—instead of being raised and fenced like the current I-75—so collisions with alligators on the roadway were not at all uncommon.
Growth has been explosive in southwest Florida since the new road opened, and the resort/lodging market has matured as well. But the somewhat slower pace and distinctly domestic U.S. tourist feeling of the resort areas is in relative sharp contrast to the international tone that has been acquired by the resort markets about 100 miles east.
It can be assumed that, in a similar fashion to Florida’s eastern markets, the “offseason” in southwest Florida was sliding into oblivion, giving way to year-round leveling of demand riding on a wave of visitors from Latin America. Third-quarter summer occupancies in eastern Florida are rising and the differential between the high and low season occupancy is narrowing, but that is simply not the case in the southwest resort areas studied. It is, indeed, “different over here.”
Data used for this article was provided by STR, parent company of Hotel News Now. To provide a “southwest Florida” overview, STR ran a sampling which included hotels and resorts in several major areas including the following:
- Naples and Marco Island
- Fort Myers and Fort Myers Beach
- Sanibel and Captiva islands
- Bonita Springs
- Boca Grande
- Cape Coral
As shown in the chart below, annual occupancy in the southwest Florida area has generally been significantly lower than the markets studied for earlier articles over the same 20-year period, especially in recent years. (Note: Because the first several articles in this series were completed prior to year-end 2015 data being available, for consistency purposes all the analyses shown in this article cover the same 20-year period ending in 2014 as did earlier analyses.)
As shown in the graph, while relatively close in the late 1990s since approximately 2000, the differential in occupancy between southwest Florida and sister resort areas in eastern Florida has widened.
On the “supply side” of the equation, there has actually been a small decrease in the number of available rooms over the 20 years studied. The three east coast markets have experienced approximately a 2% decrease in supply, according to STR numbers—primarily as smaller, “mom-and-pop” motels left the system.
In the southwest Florida market there also has been a decrease in supply, albeit a smaller one equating to a 0.9% decrease over the 20 years. While the intent of this article is not to be a deep statistical analysis, this small differential has to be taken into account, and yet, it would not appear to fully account for the differential in occupancy levels.
Recalling that the central premise of the article series was that the offseason summer months were getting much busier, and that such was indeed the case on the southeast Florida coast, the next step in this analysis was to look at the differential between the three east coast destinations and the southwest specifically during the summer months.
As shown in the graph below, the differential between southeast and southwest Florida performance during those months is growing wider as occupancies at properties in eastern Florida rise on a wave of, among other things, international visitation. The same is not happening, at least not in nearly as large a degree, in western Florida. In 2014, the southwest Florida occupancy level was 15 points lower than the occupancy in the eastern markets studied.
Another clue that the markets have not changed as dramatically as those in eastern Florida can be seen by reviewing average-daily-rate performance over the period studied for the southwest Florida market and the three eastern markets. While there have been significant increases in high-end supply along the southwest coast, it is overshadowed by the proliferation of higher-end brand properties occurring in the southeast Florida which have, in most cases, substantially higher rates than the older properties in the market.
This is not to say that the hotel marketing teams in southwest Florida are asleep at the wheel in terms of working to attract new markets; that is not at all the case. In somewhat of a reverse fashion, “staycations” for families with school-aged children from Miami-Dade and Broward counties have become a significant part of the “offseason” demand.
Shopping at the generally high-end boutiques and galleries along Fifth Avenue in Naples as well as at the more moderately priced Miromar Outlets draws visitors for reasons other than the usual beach vacations. Amateur sports also have made a major and growing contribution to area visitation. Amateur players come from all over the country to play in myriad sporting events. In May 2016, Fort Myers will host the 2016 Sunshine East Showcase, an event during which talent scouts for colleges and Major League Baseball teams come to see amateur baseball players in action.
While the eastern Florida resort markets have taken on a distinctly international flair, to many American families the quieter, more familiar pace of the southwest resorts provides a more comfortable environment.
But there is change in the wind. Major investments have been made in the higher-end properties in the market (for example, a dramatic reinvention of the Ritz Carlton Naples) in recent times. And major hotel brands are exploring expansion in the market at both the popular select-service level, which has been proliferating, and also at the higher end. So, if you are looking to find a bit of “old Florida,” it can still be found, but you’d better not wait too long.
Gregory T. Bohan, ISHC, BS Cornell University, MS Florida International University is a member of the full time faculty at Florida Atlantic University’s College of Business, instructing in the rapidly growing Hospitality and Tourism Management Program. Prior to FAU, Mr. Bohan taught at the Chaplin School of Hospitality at Florida International University. His professional career includes more than 35 years of hospitality consulting – primarily in the areas of financial structuring and market feasibility. Before embarking on his current, full-time teaching career, Mr. Bohan was Managing Director of Pinnacle Advisory Group’s Florida/Caribbean practice. Earlier in his career he was a co-Principal in charge of the consulting practice at PKF’s New York office as well as developer/owner/operator of full-service country inn in Vermont. He is on the Executive Committee of the Board for the Hotel Sales & Marketing Association’s South Florida chapter and active in other industry affairs. He can be reached at Florida Atlantic University via email: bohang@fau.edu.
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