This series of stories will profile mid-sized and smaller cities across the globe, highlighting the depth of challenges from the pandemic to their travel economies, as hotels, airlines, airports, and tourism-related enterprises, especially small businesses, struggle to keep going.
If there was an iota of a travel economy silver lining to coronavirus lockdowns earlier this year, it was that many leisure markets around the world — from the Greek island of Myokonos to Cape Cod in the U.S. — were still a few months out from their vital money-making summer travel season.
Tour operators, hotel owners, and restaurateurs in these parts of the world at least had a few remaining off-season months to reconfigure protocols and adapt to a new normal — or at least what they thought might be a new normal.
But in northeast Florida, the pandemic and its accompanying economic lockdown couldn’t have arrived at a worse time.
“March, April, and May are our busiest months. That’s our revenue generation to pretty much carry us through the year until the fall,” said Lisa West, who owns the Addison on Amelia Island bed and breakfast outside Jacksonville. “To have the last guests walk out March 20 and the first guests back not until May 12 was a killer for us, an absolute killer.”
Greater Jacksonville has a lot of the tourism attributes a market should covet coming out of the pandemic. While Florida cities like Orlando or Miami typically attract millions of global travelers who fly in each year, Jacksonville is a major drive-to market.
Amelia Island is the region’s version of Cape Cod or the Jersey Shore, West said. Most of the Addison on Amelia’s guests drive to the inn from Florida or surrounding states and typically no further north than Charlotte, North Carolina.
But even drive-to markets, now expected to outperform fly-to destinations, suffered during the spring.
The inn never officially closed from the pandemic, but the Wests watched as state leaders ordered one-by-one shutdowns on each of the aspects that bring tourists to Amelia Island. First, there were bar lockdowns on St. Patrick’s Day. Then, restaurants were ordered to close their doors to anything but takeout. Finally, other small businesses began to close down.
“The last bang of the gavel was the closing of the beaches. You’re sitting here with no reason to come,” West said. “All the reasons to visit Amelia Island were taken away.”
Operators of the One Ocean Resort & Spa in the Jacksonville Beaches community of Atlantic Beach similarly watched its biggest revenue-generator slip away with the pandemic. The PGA Tour cancelled the Players Championship at TPC Sawgrass one day into the planned tournament, which is usually hosted each March and is a major occupancy boost to area hotels.
“That was the cold water thrown on us as a hotel,” said David Mariotti, general manager of the One Ocean Resort & Spa. “That’s typically our equivalent of the Super Bowl.”
Greater Jacksonville’s diverse travel economy — from the sandy getaways of Amelia Island and the First Coast to sprawling convention hotels downtown — normally generate enough demand from a variety of industries to keep businesses humming even through a normal downturn, local experts say.
But the pandemic has taken a toll on all aspects of the regional hospitality sector.
Jacksonville International Airport’s 95 percent plummet in passenger traffic this summer was such a financial hit that airport leaders paused plans for a new terminal and efforts to land a non-stop flight to Europe.
More than 50 Jacksonville Airport Authority employees took voluntary severance, and the organization reported cost-cutting moves like raising the climate-controlled temperature and turning the lights off in parts of the terminal.
Josh Martino, president of the 71-year-old Bono’s Pit Bar-B-Q local restaurant chain, is optimistic his family business has the longevity to make it through the pandemic. But he recognizes the entire restaurant industry is gasping for a lifeline.
“In March, I wish I could tell you I had this great bravado and confidence, but we thought we were going to lose half our restaurants, and we thought the other half would be barely hanging on,” Martino said. “It’s heartbreaking because it’s nobody’s fault. Nobody is immune to this.”
Hotel occupancy in Jacksonville fell from nearly 76 percent in February to a low of 26 percent in April, according to STR. While it has since partially recovered to nearly 54 percent in July, local hoteliers aren’t expecting pre-pandemic revenue levels anytime soon.
“You begin to be very grateful and thankful for what you have because there are a number of thousand-room hotels doing a hundred rooms a night,” said Fred Pozin, the owner of the 150-room Ramada by Wyndham Jacksonville Hotel & Conference Center. “When I do a hundred rooms a night, I think I won the lottery. When they do a hundred rooms, that barely pays to keep the lights on for a few hours.”
Resetting the Dining Room
The new year was misleading to Chad Munsey, owner of the Bearded Pig barbecue restaurant and beer garden in Jacksonville’s San Marco neighborhood.
“We started the year with the first two months being gangbusters and I thought, ‘Wow, 2020 is going to be through the roof,’” he said. “Then, three weeks into March, we had to shut down for seven weeks. To say it’s been a struggle has been an understatement.”
Munsey dipped into a rainy-day fund of savings as well as a Paycheck Protection Loan received under the $2 trillion economic relief bill passed in late March to help his staff of 45.
“I try not to stare at the numbers all day and wait for the sales go up, but it’s hard not to do that,” he said. “The dire concern is, if this pace of revenue continues for another six months, it’s going to be tight. It’s going to be really tight.”
Sales are down 35 percent from normal revenue levels, but Munsey recognizes his restaurant is actually in an enviable spot. The fast-casual concept has lower costs than a fine dining restaurant, and the Bearded Pig has an expansive outdoor space that enables plenty of social distancing-friendly table setups.
But the business still struggles with roughly 2,000 fewer guests each week than normal, Munsey said.
There are occasional signs business is inching back. Guests from a nearby Hilton Garden Inn are usually a reliable revenue stream at the Bearded Pig and, after a hiatus during the worst of the pandemic, are beginning to once again trickle in.
“We see every three weeks a decent week, and there’s no rhyme or reason for it,” Munsey said. “I could sit here and cry the blues, but there are probably 30 restaurants who would kill to be in this place.”
Mary Jane Culhane and her three sisters co-own and operate Culhane’s Irish Pub and Restaurant in Atlantic Beach, Florida, along with a second location in Jacksonville’s Southside neighborhood.
The original location in Atlantic Beach opened 15 years ago and built a strong following of local residents and visitors to the beach. But Culhane’s newer location relies heavily on business traffic and travelers to nearby offices for companies like Bank of America, Deutsche Bank, and health insurance provider Florida Blue.
The Atlantic Beach restaurant was able to bounce back quicker, closing in March for only a few days and then reopening for curbside takeout. Even with state orders currently capping restaurant capacity at 50 percent, the beach venue is operating at about 80 percent of its normal revenue, Culhane said.
It’s a different story in Southside. That restaurant, which the Culhane sisters acquired two years ago with dreams of utilizing its large space to accommodate events and lunch business crowds, had to shut down for two months earlier this year during the worst of the pandemic.
While business is slowly coming back, revenue is still down as much as 50 percent due to empty offices and hotels in the surrounding business district.
In the meantime, the Culhane sisters shifted their business model to include delivery of box lunches and expanded their Southside patio to accommodate more outdoor dining. The restaurant owners are optimistic about the upcoming football season, hoping this may bring more sporting fans to the Southside property due to limited capacity at stadiums.
“Day by day, business is slowly recovering, but the bills never end,” Culhane said. “We need patrons in our doors. That’s the bottom line. If business and tourism don’t return to the office parks and hotels, it’s going to be a challenging future.”
Seeking a Revenue Life Raft
Lisa and Ron West remained active during their nearly two months of zero check-ins at the Addison on Amelia Island.
“We spent our days applying for loans and then cleaning the inn from top to bottom and redoing policies and procedures to what our new normal would look like when we did reopen,” Lisa said.
The Wests were able to weather the worst of the crisis through relief measures like a PPP loan as well as a Small Business Association bridge loan that covered their mortgage at the inn during what would be their strongest months of occupancy.
But the husband and wife team and other members of Jacksonville’s travel economy are settling into the reality of a new kind of travel environment.
“Compared to other markets around the country, we’re actually doing okay,” said Katie Mitura, vice president of marketing at travel organization Visit Jacksonville. “For us, it has become a much more normal thing to see occupancy on our weekly and monthly reports come in at the low to mid-50s [percent range] and be thrilled that we’re doing that well.”
The Jacksonville region’s mix of beach-oriented hotels as well as limited-service hotels catering to transportation, medical, and construction teams — which have proven to be the most durable streams of business for extended stay hotels during the crisis — enable the city to perform as well as it is, Mitura added.
The U.S. national hotel average was hovering at 48 percent the week of August 29, according to STR.
A Silver Bullet That Never Fired
A revenue carrot was briefly dangled in front of struggling area hoteliers and restaurants earlier this summer. U.S. President Donald Trump pushed to move the Republican National Convention — originally slated to run in Charlotte, North Carolina — south to Jacksonville after North Carolina Gov. Roy Cooper raised concerns over hosting an event with tens of thousands of attendees amid a global pandemic.
The four-night event would have delivered a much-needed boost in business to struggling hotels, but Trump eventually called off the move in light of rising case counts in Florida and criticism for moving forward with a dense, in-person event.
Tourism leaders aren’t entirely gutted.
“It’s like being given the Super Bowl and having it taken away from you at the same time,” Pozin said. “From a short-term perspective, we lost a lot of money, but, from a long-term perspective, we did better by not having it.”
A 150-room property like Pozin’s likely took a $200,000 hit from cancellations around an event like the RNC, which stood to sell out hotels across Greater Jacksonville, the hotelier added.
One Ocean Resort had a total buyout for the week surrounding the convention, Mariotti said.
But the Republican convention was only one week, and the impact of coronavirus is likely to last for years.
“From a short-term perspective, we lost a lot of money, but from a long-term perspective, we did better by not having it,” Pozin said. “As a longtime resident, I was worried about how we would have looked on the national stage.”
A Long Road Ahead
Mitura still sees plenty of reasons to be optimistic about how Jacksonville is faring compared to other markets.
Downtown convention hotels may be struggling, but the city’s network of urban parks, nature areas, and surrounding beaches give Visit Jacksonville plenty of outdoor attributes to market to travelers who may prefer to stay in an open-air environment during the pandemic recovery.
The One Ocean team is hopeful bigger group business will return in the early part of 2021 when, hopefully, a vaccine is in widespread distribution.
Until then, hoteliers like West on Amelia Island are adapting to host what business they can get in the near-term. The Addison had its first sold-out weekend since the pandemic over Labor Day, and West is optimistic for both her own property and Greater Jacksonville.
The innkeepers and surrounding business community are marketing to local, drive-to travelers as well as repeat customers ahead of what they hope is a busy fall season.
That initiative has at least started to pay off.
“While our occupancy and revenue and everything else were in the toilet, at least our repeat guest rate almost hit 100 percent,” West said with a laugh.
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