Checking In

Guests seeking accommodations in Southwest Florida have gained a number of new options in the past couple of years.

Some of these hotels have introduced brand names, amenities and conference space to waterfront locales, busy interstate exchanges and storm-damaged areas. The projects range from low-budget, extended-stay motels with limited services to full-service chain and boutique hotels.

Along tranquil Charlotte Harbor, guests can soak up the scenery from new rooms at Four Points by Sheraton Punta Gorda Harborside, a moderately priced property built on the site of the Holiday Inn Harborside, which was destroyed by Hurricane Charley. At the Holiday Inn Fort Myers Airport – Town Center, which opened in February, guests have easy access to Southwest Florida International Airport and are within walking distance of the shops and restaurants at Gulf Coast Town Center.

“We’ve certainly had a bit of a surge over the last couple of years,” says Suya Davenport, executive director of the Lee County Visitor & Convention Bureau. “A lot of these hotels were really in the pipeline from when everything was going gangbusters.”

More than 1,200 rooms have been added in Lee County in the past year, and another 650 are expected by mid 2010. In Charlotte County, the number of rooms had lagged behind demand for years, says Becky Bovell, director for the Charlotte Harbor Visitor & Convention Bureau. By this past summer, 1,587 hotel and motel rooms had been added, including budget properties such as La Quinta Inn & Suites and Country Inn & Suites on I-75, and boutique and chain hotels in Punta Gorda, such as The Wyvern Hotel and Four Points.

“It was a palpable need,” Bovell says. “Hoteliers and development companies recognized this need and began a flurry of hotel building.”

The skyrocketing number of hotel rooms, mostly in Charlotte and Lee counties, arrived just before and as the recession hit and drove down the number of visitors. That, along with the lending environment drying up for hotels, caused developers such as A2Z Hospitality Management, which built Four Points, to halt plans for future properties.

“We definitely have an oversupply of rooms for the economic conditions we’re in right now,” says Randy Krise, owner of Krise Commercial Group and president of the Southwest Florida District of the CCIM. “The owners that I represent all would love to build, and had plans to build, but have all backed off because the daily room averages are down.”

Investors and builders of hotels that opened in 2008 and 2009 didn’t expect the economic downturn.

“When all the developers started developing or planning these hotels in this area, nobody would have done anything if we had thought this was going to be the state of the economy,” says Fred Hirschovits, president of Naples-based Twenty/Twenty Worldwide Hospitality, which opened Holiday Inn Fort Myers Airport – Town Center and had plans for more projects.

“Today, if you ask any hotel person, there are too many hotel rooms,” Hirschovits says. “Times are tougher and obviously instead of running full every day, you’re not running full every day.”

More hotels are set to open this year or next, but some projects announced in the past couple of years, such as the Hilton Garden Inns in Punta Gorda and near Southwest Florida International Airport, have been delayed. Because hotels require three to four years to complete, developers, real estate experts and tourism officials are anticipating hotel construction to slow for the next two or three years.

“We have, right now, what we need,” Bovell says. “I’m not saying we don’t need more, and in a better economy we’re going to get them.”

Hirschovits postponed projects due to the lack of demand and tough lending environment. John Zaccari, CEO of A2Z Hospitality Management, expects the land along I-75 his company purchased three or four years ago for hotels to remain empty since it couldn’t obtain financing. He had expected to open at least three more hotels by now.

“When the housing market went away, every developer said, ‘Oh, we’re going to build hotels.’ You read in the paper every week that this developer that used to build condos was going to buy a hotel. Thank God they caught it at the banks. Financing dried up,” Zaccari says. “If the banks just handed them free money to build hotels, then we would be in a worse mess than we are in today.”

Krise estimates that at least 15 hotels are for sale. Zaccari expects another surge to go up for sale in 2010, as some hoteliers find it more difficult to pay the mortgages. That likely will attract real estate investment trusts on a rebound, he says.

Hirschovits expects to see revenue growth as high as 10 percent in 2011 and 2012 at his hotel, which features 170 rooms and 7,000 square feet of meeting space at the Alico Road and I-75 interchange.

“If you’re an owner/investor and you can weather this year and next, then I think the return to healthy standing is going to be strong and quick,” he says.