Jodi Weinhofer has been at the helm of the Lodging Association of the Florida Key and Key West going on 10 years. While the association represents hotels throughout the Keys, The Weekly Staff sat down with her last week to discuss the future of lodging in Key West.
“I think the biggest change I’ve seen in nine-and-a-half years on the job is the real estate trusts coming in and buying up the hotels,” Weinhofer said. “Mr. Jacobs owned the Pier House, and he often said, ‘Take care of the asset and the asset will take care of you.’ The trusts coming in are looking for a profitable investment and hotels offer that. Not just in Key West, but throughout the country and in Europe.”
Weinhofer said in the past the hotels were supportive of the community.
“Because of local ownership or local management, many of lodgings members supported non-profit events,” she said. “The new trusts have a different idea. This will change the way hotels interact with the community.”
Weinhofer stressed that hotels are a good investment and she expects to see changes on how they work with the local community.
“The sales and changes in hotels are really confusing outside the industry,” she said. In the past, hotels were owned and managed by one entity. Now, there can be as many as three — the property owners, the brand or “flag,” and management. Weinhofer said the big buyers right now are the real estate investment trusts (REIT) and large corporate investors.
“The REITs portfolio investment is for more long-term, three to seven years, where corporate investors are looking for profit on their investment and the sooner the better,” she said.
Another benefit Weinhofer sees in REIT investment is that because they are looking at long-term investment, they will invest in upgrading properties, maintaining them so the value continues to increase.
Considering Key West, Weinhofer has seen the sleepy days of summer change to a season that has kept hotel occupancy higher than the state average.
“We have the residents from South Florida who drive-down,” she said. “And we also have international guests come on vacation, spend a week in Orlando, maybe another week in Miami and the last of their vacation in Key West.”
Weinhofer said the international visitor wants the heat, expects it. And those that show up in what passes for the Fall in the Keys, still find it warmer than most cities in Europe, she said.
“The Europeans come for the outdoor activities,” she said. “Warm water to swim in, a reef, fishing, things they can’t do at home or if they can, the water is cold and not as pristine as ours.”
Also, an important fact, Weinhofer said, is that the Euro exchange to the dollar favors the European. As the European economic downturn happened, Weinhofer said she saw a change in what countries favored the Keys for vacation.
“Of course the Canadians are a big segment of our tourists,” she said. “But the European visitor is changing. For a long time the British were here in numbers, but now it’s the Germans. And we are seeing a rise in the number of Scandinavian tourists too.”
With all the successful local hotels, no matter the owner, they face the same serious problem.
“We have a new hotel opening at the Historic Seaport and they are already advertising for employees,” Weinhofer said. “You have the hotels at the triangle ready to reopen and they need employees. Lodging is the largest employer in the Keys.”
Employee needs have to be met, if hotels expect full staff.
“I don’t know offhand, how many positions are going to be needed at all the new hotels,” Weinhofer said. “But it might be difficult of fill them. The main reason is the lack of affordable housing. Key West is expensive, housing is a premium and rents are high.”
“Even so,” she said, “the room occupancy in what’s called ‘off’ season averaged 60 percent and mainland hotels only see that number in season.”