The summer leisure season, as predicted, has been bountiful for beach and resort destinations, as travel demand pent up by the pandemic is unleashed in the U.S.
But for the Ocean’s Edge Resort and Marina in Key West, that “summer demand surge” really started in February.
In large part due to the state of Florida’s more-relaxed approach to COVID-19 regulations for businesses, the hotel has operated at pre-pandemic occupancies — and at rates significantly higher than they were in 2019 — since February, according to General Manager Tom Elwood.
The resort wasn’t fully immune to the COVID crisis, however. After a pandemic was declared in March 2020, the Monroe County government made the decision to close the Florida Keys to visitors, and the hotel shut down until the Keys reopened again that June.
“Once we reopened, we ran pretty much from June through the end of the year at about a 40% occupancy. Then, January and the holidays came and they were … OK. They were not great, but once we got to February, things just took off,” Elwood said.
“When a good part of the country was shut down, Florida was not. So, Florida was a location that people could come to.”
According to data from STR, CoStar’s hospitality analytics firm, hotel occupancy in Key West averaged 89.7% in February, and was in the 90% range through June, reaching a high of 94.7% in March. That’s higher than the average for the Florida Keys as a whole, which peaked at 91.1% in March.
Elwood managed various Marriott International properties for 36 years before joining Ocean’s Edge in February 2017, about a month after it first opened. He said the independent hotel, which is a member of the Preferred Hotels & Resorts collection, had more flexibility in reopening and ramping up without having to adhere to the standards of a brand.
“Marriott has the recipe; it tells you exactly what to do … from soup to nuts, absolutely. Here, you can do what you want, really,” he said. Sunstone Hotel Investors bought the hotel resort in 2017.
“It’s not like there were any rules or (standard operating procedures) or anything like that. We had to set that here. And, you know, I wanted some organization and some structure. I didn't want to write a rule book like Marriott's because I wanted the flexibility. And now we can just work on, how do we make it better?”
To make the resort better, the owner has been willing to focus investments on the guest experience, Elwood said, such as expanding restaurant service to the property’s six pools and adding a tiki hut, which is the launching point for guest experiences that include kayaking, stand-up paddleboarding and bicycling — all available to guests for two hours a day as part of the resort fee — as well as jet ski tours.
In a one-on-one interview, Elwood spoke more about how the hotel has fared during the pandemic and risen to industrywide challenges, including staffing amid a labor shortage.
You had a little bit of a disruption as a result of the pandemic. When the hotel was closed, was there anything you could do as far as thinking about the future or to reset?
We got down to eight or nine people that were here on property [fully staffed, the hotel employs between 125 and 140], and our main focus was to protect the asset. We did what eight or nine of us could do to continue to maintain the property. And then, you know, we worked on what our protocols would be once we reopened — social distancing and sanitizing stations throughout the property, people wearing masks, that sort of thing. … Now that the vaccine is here, a lot of these things have been relaxed.
Has it been a challenge to restaff the hotel as guests came back?
Prior to COVID, staffing has been a top-three concern in Key West. It’s a small island, there’s not a lot of housing, and what housing there is, it’s very expensive. So it’s just always been a struggle to find people. And then coming out of COVID, we had similar issues as other places did. I think we did a good job of keeping in touch with our people, because we got most of our staff back. I think we fared better than most. …
We’ve been anywhere from looking to hire six to 10 people — a couple in housekeeping, maybe four or five in food and beverage, maybe a couple in the rooms and in the front office. You're always looking for somebody.
Have you changed the way you approach recruiting in any way?
It hasn't helped us yet, but our management company is supportive of the H-1B visa program and we've signed up for that. And what we're hoping is that November 1 will be the start, and then it will go for 10 months. We’re anticipating that we’ll have interviews within the next 30 days to get people lined up to come here for November. The challenge there is that you’ve got to help find housing, so we’ve been able to secure one apartment, and we need a second one so that we can house everybody that we have coming or anticipate coming — about 10 people.
Something that’s been happening in the market is that hourly rates have gone up. And so we’ve had to stay on top of that and make adjustments to our pay scale.
Has it helped that average daily rates at the hotel have run higher?
People always ask about the slow times. There’s never any really slow times because occupancy does hold pretty well year-round. What does change is the rate. In the summer months, when you get into August and September, the rates will [typically] start to go down. Now we have not seen that; that should be happening now. We’re north of $400, that’s what it’s been and that’s what the market is getting here. It’s just incredible.
The question is, how long does it sustain? There are dynamics, I think, that are going to change things at some point. There’s not a lot of international travel right now, and Key West has seen traditionally a fair amount of international travel. It’s not been easy to get to Mexico or the Caribbean. And so a lot of people have had to change plans and come to Key West or Florida because it’s just too hard if not impossible to get to Caribbean or Mexican locations. So I think that demand, when things start to reopen, will go to other places and even across the United States, in the Northeast.
How have your guests changed, if at all, as a result of the pandemic?
One of the things we’re trying to do here is really elevate our service offerings. Since this place opened in January of 2017 … the mission has been, let’s elevate the game, because in doing that, we’re going to be able to command a higher ADR. For example, the restaurant … we changed all the [furniture, fixtures and equipment] ... we put [an enclosure on the patio] and we put air conditioning in here. So now we have the ability in the hottest months to be able to sit in the conditioned space. …
At the end of 2019, we were about No. 30 out of 51 on TripAdvisor in the market. Today, we’re at No. 10, and that’s not easy to do – to move the needle on TripAdvisor. So we’ve upped our game, our customers have recognized that we’ve upped our game and we’re getting a better customer as a result. …
It’s a customer that’s willing to pay more for what they get. We couldn’t command this kind of rate in 2019, but now we can. It’s really interesting to see how this is unfolding. It’s nice when you have a plan and it works.
One of the things that’s under consideration now is whether or not to add meeting space here. If we added meeting space, I think it would accomplish a couple of things. It would allow us to get midweek business, which would then shrink the hotel and cause compression, where we could push the rate midweek, more than we can right now. From a social standpoint, we could really take advantage of that. The owners are looking at it every different way they can possibly look at it but just haven’t made a decision as to whether or not we’re going to do it.