- October 9, 2020
Despite the tremendous growth in the lodging sector along the Gulf Coast over the past eight years, dozens more hotels have been planned to meet heightened tourist visits, group meeting and business travel.
But those projects could be in jeopardy because of the coronavirus pandemic, a leading hotel broker contends.
Kent Schwarz, an executive vice president at brokerage firm Colliers International, in Tampa, says that more than 80 new hotels were planned throughout the nine-county Gulf Coast and Central Florida region prior to the virus outbreak.
Citing Smith Travel Research (STR), a leading hospitality information firm, Schwarz notes that the three-county region of Southwest Florida —Collier, Lee and Charlotte counties — had more than 30 new hotels on its books. Of that total, Lee County was envisioned for 27 additional lodging properties.
In the Sarasota County and Manatee County submarket — an area where nearly 2,000 new rooms have been added since 2014 — an additional 25 new properties have been proposed.
Hillsborough County alone has 23 new hotel projects planned, according to STR.
“Supply before the pandemic was beginning to outpace demand in many areas,” Schwarz says. “Now, with the virus, I think you’ll see that anything that’s possible will be done to delay moving forward in the short term.”
Even if developers are willing to move forward, he says, lenders will be more cautious in allowing construction draw downs or approving new debt.
“I think lenders will be very reluctant to underwrite new loans for the foreseeable future, in part because things were already growing tight because of new supply. The virus has only increased that reluctance.”