Hospitality, the engine of Central Florida’s economy, was no doubt hit last summer.
When the global COVID-19 pandemic forced many U.S. businesses to shut down in March, hotel owner-operator AD1 Global closed its 434-room Days Hotel by Wyndham in Kissimmee and delayed the expected opening of its dual-branded Aloft and Element hotel in Orlando’s tourism corridor.
What does one do in that situation? AD1 Marketing Director Jon McMillian told GrowthSpotter the company had to stay opportunistic, with a clear view of an end-goal in sight.
AD1′s national portfolio is operating at an average of about 50% occupancy, while its Orlando properties are at about 40%, he said. Typically, a hotel can operate at 50% occupancy and still generate enough cash flow to pay employees and make a little money, he adds.
“Opening up now gives our hotel a fighting chance,” McMillian said. “Even if we struggle a little bit, it’s better than having a closed hotel. It’s in the best interest for the general public to hire employees.”
Last year, to keep the wheels going, AD1 focused its efforts on updating and rebranding its Days Hotel by Wyndham in Kissimmee amid a worldwide drop in travel demand. Today, those renovations are nearly complete and the dual-branded hotel on International Drive is slated to open by the end of February.
The firm currently has 18 employees at the Orlando location, and McMillian said it plans to hire a handful more by the time of the opening for a total of 25.
Hotel owners and operators like AD1 anticipate a slow rebound for the industry in terms of hotel occupancy and revenue as vaccines are widely — albeit slowly — distributed around the world.
The American Hotel & Lodging Association State of the Industry Report, issued Jan. 21, does project a modest recovery in 2021 largely due to pent up demand and availability of the COVID-19 vaccine. The report found that 56% of consumers are planning to travel this year, compared with 28% who traveled and stayed in a hotel in 2020. The AHLA estimates the hospitality industry won’t reach pre-pandemic occupancy levels until 2023, at the earliest.
Construction never stopped for its planned dual-branded hotel at 5730 and 5750 Central Florida Pkwy., but it did slow down, McMillian said. AD1 Global anticipated to open before the December holidays.
To stay afloat last year, the company applied for the Paycheck Protection Program (PPP) loan, and is in the midst of applying for a second draw. The Element and Aloft hotels will bring the company’s total number of assets in Orlando to nine.
The side-by-side Element and Aloft hotels will introduce 284 rooms to the area by next month. Hollywood-based ADËLON Capital is an investment partner. There’s will be the second major hotel opening on I-Drive during the pandemic, as the TRYP by Wyndham debuted just before Thanksgiving.
McMillian said a huge emphasis on cleanliness and open space were both taken into account while building and designing the hotels.
According to AHLA’s report, 62% of consumers are placing overall cleanliness on the top of their lists when choosing a hotel. That’s up about 24 percentage points over pre-COVID preferences. The report also found, a little more than half of consumers say that enhanced cleaning regimens will make them feel more comfortable during their stay.
“We’re taking very aggressive, preventive measures to keep the hotel safe,” he said. There will be 24-hour before occupancy cleaning of rooms, and round-the-clock cleaning procedures for all public spaces.
Amenities include pet-friendly services, an outdoor, saline swimming pool and garden area with a bar and space for live music and entertainment. Guests at both hotels will have access to a fitness center, business center and event rooms at the Aloft hotel.
In Kissimmee, AD1 is investing nearly $13 million in upgrades with the help of a land-lease agreement executed this week by the company for the property beneath the Disney-area hotel.
AD1 sold the land for $16.36 million to Aventura-based Kawa Capital Management Inc. under its Maingate Propco Inc. unit, according to the deed.
“We sold the land and leased it back. It’s a type of financing,” AD1 Global CFO Alex Fridzon told GrowthSpotter. “We have a first-mortgage lease hold.”
The 436-room hotel, built in 1984, was a Park Inn by Radisson when AD1 Global bought it in 2018 and converted it to a Days Hotel by Wyndham. Once completed, the property on Maingate Lane in Celebration will relaunch as the more upscale branded Wyndham Kissimmee Celebration, a full-serve conference center hotel with a 1,750-square-foot indoor children’s play area, TopGolf Swing Suites and a full Starbucks store inside.
“The hotel is about 90% renovated” and is open, Fridzon said. Construction of the Starbucks store will start in a few weeks and likely be completed this summer.
The TopGolf suites also are about 90% complete, he said. Guests will be able to reserve time in the suites to enjoy golf simulations on a large screen and other simulated games with lounge seating and food and beverages. The suites also will be rentable for weddings and corporate events and the conference the center will attract. The suites will be the first TopGolf concept in the Orlando area and the fifth in Florida.
The children’s play area, one of the largest in any hotel, Fridzon said, is just about finished. The hotel is next to Animal Kingdom and guests can see Disney World’s fireworks from their rooms.
“We’re very excited. We’re almost done,” he said. “Obviously we’re going to open up not in the best situation but we’re hoping it will get better.” About two thirds of the hotel rooms are open and the other third are in the last stages of renovations, he said.
When all renovations are finished, the Wyndham flag will go up outside. “We should be a Wyndham sometime in March we hope,” Fridzon said. AD1 Global will then work on returning the hotel to its Disney Good Neighbor status.
The hotel property also includes two vacant parcels north of the hotel on almost 6 acres. Osceola County approved a rezoning request for the entire 22 acres to Commercial Tourist zoning, which would allow for future multifamily development on the vacant land with no height limit and permitted density of up to 80 units per acre.
“We’re still looking through different options” for the land, Fridzon said, declining to elaborate.