Hotels in Orlando, Florida have come a long way since the pandemic crippled the market. However, operations have not returned to normal. Profits per room are down 62.6% from 2019, according to a new report from hotel analyst STR.
Nationwide, the hotel recovery stalled in October. The main culprit was the lack of business travelers. October is a typically big month for group business travel, said Raquel Ortiz, Assistant Director of Financial Performance for STR. Some groups did come back, but obviously we did not see what we would have expected, she said.
Senior Vice President of the Florida Restaurant and Lodging Association agreed. Geoff Luebkemann told the Orlando Sentinel, “Leisure demand has been encouraging but that doesn’t bring the spending from a large group that’s going to do multiple meals a day and all the ancillary services that come along with that. Overall, spending between leisure and business is pretty different.”
The loss of convention business has been a major blow to the Orlando economy. The Orange County Convention Center estimates that cancelled and rescheduled events this year have cost the region more than $1.6 billion.
Orlando County Mayor Jerry Demings said the drop in tourism tax dollars might prevent the county from resuming work on the $605 million expansion of the convention center.
Convention business and foreign visitors make up a sizable slice of Orlando tourism. The continued loss of this revenue in the nation’s second largest hospitality market could result in additional downward pressure on hotel valuations and other property types that rely on and service the tourism industry.
All property owners with ties to Orlando tourism and especially hospitality properties, need to carefully review their 2021 financials as they may provide support for a reduced 2022 tax assessment.