GlobeSt.com EXCLUSIVE: Hotel Consultant Cautions Industry

Despite record September room tax collection numbers just posted by the Orange County comptroller's office (click here for story), Webb says the actual tourist and visitor count in Central Florida for September was dismal, due to the trio of hurricanes that struck the state in August and September.

"The [Central Florida] marketplace will not see another September like the one of 2004 in the foreseeable future and September readings will be distorted for years to come," says Webb, who has managed and operated hotels in his 35-year real estate career. He says the September occupancy numbers are largely an aberration.

"Orlando area hotels, suffering from a desperate lack of tourist travelers in the month following the impacts of the [three] hurricanes, became the unlikely beneficiary of a community racked by leaking roofs, crushed buildings and hundreds of tons of debris," Webb tells GlobeSt.com. "Simply put, the hotels were filled with local residents with uninhabitable homes, contractors and carpetbaggers, and insurance claims personnel who were driven into the hotels as the sole option of a dry roof over their heads."

He says, "Who knew such a freakish set of circumstances would, in fact, set records which will likely not be broken in the foreseeable future for the monthly comparisons of September." Webb agrees with others in the industry "the [September] collections are extremely encouraging and do represent a genuine recovery in Central Florida. Recent years have been difficult for hoteliers, but the spirit of the industry, coupled with a bit of lender patience, has helped us reach the recovery of 2004."

However, he cautions, "it is necessary to temper one's enthusiasm with a little reality." He says that "while 2004 fiscal year numbers are up 19% over the year prior and exceed year 2000 collections, there must be some injection of facts into the euphoria."

As a starter, Webb tells GlobeSt.com that since 2000, "the inventory in the market of rooms available to the public has grown by about 12,000 and the average daily rate, while up about 5% over the still depressed 2003 ADR, is still $1.18 below the rate of 2000." Occupancies, "while seven points above the year prior, are almost exactly equal to the four-year-old number," the consultant says. "In other words, the market has only finally absorbed the additional rooms after four years."

Webb says that statistic "should be a lesson for both lenders and developers." Still, he says, "with the promise of removing some of the older rooms from inventory over the next 12 months and the retardation of development over the past three years, there is true upside potential in the market."

The consultant is satisfied "we are in the midst of a genuine recovery for Central Florida's travel industry." He says, "If the state of Florida is able to assure the world that it is business as usual in Orlando and that Disneyworld, Sea World, NBC Universal Studios and the myriad of entertainment locations which charm the traveling public are at full speed, you may look assuredly to a record holiday season for 2004."

Webb adds, "The bottom line is that the increase in collections is outstanding, but some continued restraint is necessary on the part of developers in order to permit a full recovery from the depressed years which have crippled the industry since 2001."