Interview: Heiko Dobrikow

Slow recovery

The hotel industry is seeing the recovery favor those with beach and outdoor access over city hotels

Heiko Dobrikow

Executive Vice President & General Manager – The Las Olas Company & Riverside Hotel

As the economy reopens in South Florida, how has the hospitality business shared in the recovery? The recovery for our hotels has been super slow, and when you take a look at our county, you have the beach, the city and then the west. The beach properties have recovered a little bit better than the city hotels, and even better than out west. The reason is that everybody wants to have that al fresco experience. When you stay at resorts or our hotel, you have outdoor experiences like the beach and Las Olas Boulevard where you can walk outside from wherever you are staying. That has made the recovery for the beach resorts and hotels in an entertainment district more prevalent. However, all of us have posted poor results since the pandemic started.

How did you pivot your business focus during the pandemic? We have truly been the poster child in our community for how to do things right when it comes to putting protocols in place. We are not selling the hotel, we are not selling Las Olas, we are not selling Ft. Lauderdale. We are selling safety, and a clean and safe environment. That’s what our customers are telling us because right now what’s most important to travelers is not the hot breakfast, not the comfortable bed or the food and beverage outlets that you have, it is how you are keeping everybody safe.

We put a very strict protocol in place in our hotel. Everybody was temperature checked, be it a group attendee or a transient customer. We followed all the CDC protocols for social distancing markers, for glass barriers and sanitation stations throughout the hotel.

What opportunities are arising for your business from the pandemic? The analog version is that we had to become much smarter in how we deal with all our expenses. Expenses were a pivotal aspect of surviving this game. We had to tighten our belt, and many of us had to double up on our duties to find the balance to handle the limited occupancy we had and not drain our savings as rapidly.

The digital version relates to all the new technology that might come out. For the most part, the young folks in our hotel are the innovators of our future, whether it is new marketing apps, new technology for how we are processing, how we handle production in the culinary area – whatever it is, more robotics will come from this. Looking at the touch points, you might not have to stop at the front desk, for example. You check in with a credit card on file and your phone, which can be used to check into your room without seeing a front desk person.

( ) a new 1,818-space parking garage. And there is pent-up demand. Research shows that 11% of Americans surveyed would sail again right away and 23% said they would sail as soon as possible.

Hotel performance In 2019, data show that, despite a plateauing occupancy rate of 76% in Broward County, revenue grew to $1.31 billion, 1.1% higher than the previous year. The average daily rate was $146.83, while revenue per room was $111.56 in 2019. Also that year, 18 properties consisting of 1,849 rooms traded for a total of $295.5 million, compared to 19 trades for a total of $576.8 million the previous year. The $44 million trade of the 106-room Residence Inn by Marriott and the $63.2 million trade of the 236-room Renaissance Fort Lauderdale were the two biggest deals in the market in 2019.

Then came 2020 and the pandemic. Last year, understandably, saw very few deals in South Florida despite some distress in hotel finances. A failure to agree on valuations by buyers and sellers meant sales were withdrawn from the market, with just two notable hotel sales during the year – and both pre-pandemic. The first was the oceanfront Shelborne South Beach for $120 million that sold to King Street Real Estate GP, Westdale Properties and Cedar Capital Partners in January and the second was the $120 million sale of the Seagull Hotel Miami Beach to BHI Miami Limited. Then, at the very end of the year, the 96-room Gale Fort Lauderdale Hotel sold for $23 million.

Socially distanced beaches became a strategy for the local tourism industry to attract customers safely during the peak of the pandemic.

Tamas Vago

General Manager – Hilton Fort Lauderdale Beach Resort

While we can’t predict long-term outcomes from this crisis, we are confident that our world and our industry will recover. We are primarily focused on consumer confidence through strict health and safety protocols. We are also listening to our customers and o ering solutions to their needs. Flexibility is important and we are here to pivot and adjust as needed to provide a clean, safe and comfortable environment for all who enter our hotel. We need to continue to listen to our guests, remain nimble and flexible to be able to cater to their needs. We are resilient, and we fully expect that our customers will be eager to travel, experience the world and connect with each other as soon as it is safe to do so. When that recovery comes, we will continue to spread the light and warmth of Hilton hospitality to a world that will need it more than ever.

Reopening generated more business for South Florida hotels, but the absence of international tourism has hit the industry hard. While the shadow of COVID-19 looms, capacity will be constrained for the industry. According to a Destinations Florida survey, recovery for Florida’s hospitality industry will only be seen at the end of 2021 in a best-case scenario. The study involved 244 tourism-related businesses interviewed between the end of October and early November 2020 – prior to a holiday-related uptick in COVID cases and deaths in Florida. The survey also said bookings being made 30 days in advance were 59% below the 2019 mark as of June 9.

Looking ahead Looking to 2021, tourism is beginning to recover in South Florida thanks to decisive action taken by authorities to support local industry. In December, in fact, Florida’s overall revenue hit $2.999 billion, $154.4 million higher than pre-pandemic projections. However, tourism was lagging and will continue to do so until consumer confidence returns. That is being taken care of by Florida’s vaccine program, which had vaccinated 2.79 million residents, or about 12% of the population, as of Feb. 24.

Several challenges still remain for Florida’s tourism industry. House leaders have been pushing to end Visit Florida, the state’s tourism agency, which received $50 million in state funding during the COVID-19 pandemic. There is now more need than ever to attract domestic tourists while international travel is on hold indefinitely and Broward competes with other locations in Florida and the mid-Atlantic.

Also, the visits usually made by Canadian snowbirds all but ceased over the winter, costing Florida’s economy around $6.5 billion, meaning the state will have to decipher how to convince them it is safe to travel in 2021.

And in another complication for Broward’s hospitality sector, Florida will take its first step toward a $15 minimum wage this year, which could impact small businesses already reeling from COVID.

City of Fort Lauderdale:

The City of Fort Lauderdale is on the move with a 21st century vision and international presence. The city has attracted the attention of major players like Elon Musk, David Beckham, the Kushner Companies and the Tavistock Group. Public and private sector efforts are solidifying the city as a prominent economic force in the South Florida region.