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Sanibel’s hotel and resort economy are thriving again

By Staff | Feb 18, 2015

John Lai has his finger on the pulse of the hotel economy on Sanibel and in Lee County. He is the president of the Lee County Hotel Association and general manager for The Inns of Sanibel. BRIAN WIERIMA

It was a perfect storm of sorts which almost flat-lined the hotel and resort industry in Southwest Florida, especially on the islands of Sanibel and Captiva.

The worst came when the market and economy collapsed, which rode the heels of the devastation in which Hurricane Charley wreaked havoc on the island in 2004. That forced many hotels and resorts to close and remodel.

But once it looked like a recovery was going to be had from Charley, the recession hit in full force, thus laying the industry on its back.

One person who has a finger on the pulse of the hotel and resort industry on Sanibel and Lee County, is John Lai, who grew up in Southwest Florida and has been working in the field since 1991. He was named the President of Lee County Hotel Association and is the General Manager of The Inns of Sanibel, which includes Sanibel Inn, Song of the Sea, Seaside Inn and Sunset Beach.

He saw how the industry on Sanibel kept afloat during the low times of the recession and is now seeing the recovery it is currently enjoying.

A major reason Sanibel and Captiva have a strong and healthy heartbeat is the uniqueness the islands provide, over other destinations in Southwest Florida.

“Sanibel is very unique in a natural perspective,” Lai said. “The beaches are unspoiled and protected. They are as pristine today as they were 40-50 years ago. We let nature dictate how our beaches look, which is coveted by our guests.

“Sanibel is in its natural state. There are no skyscrapers, no traffic lights or roundabouts. Commercialism has not taken over. It’s literally a refuge to get away from that kind of atmosphere.”

Over the course of the last few decades, repeat customers have been the lifeline of many of the resorts and hotels.

‘Tween Waters on Captiva has a solid pipeline of repeat customers, as well as a strong, traditional reputation which keeps its business consistent, even during the down times.

“We’ve always had repeat guests and they come back every year,” said ‘Tween Waters general manager Jeff Shuff. “We retained most of those and it was a big help when the recession hit.”

While many businesses did flatline during the recession in Southwest Florida, Sanibel’s resorts and hotels had to bandy together and weather the storm. With most people cutting out leisure travel during the downturn, the tourism industry was also hit by corporate business tailing off.

“Corporate companies didn’t take the exuberant trips when the market collapsed,” Lai said. “Even weddings were down, with usually an average of 200 people attending, which went down to 100, or they just stayed inland to get married. One of things great about Sanibel, is its resiliency. We had to manage our manpower, finding different things to do, instead of cutting costs. Some resorts/hotels which worked under the same umbrella, were able to pool their services together and be shared. Our properties were able to pool our resources together and share staff.”

Eventually, the blood started pumping back into the industry, although it did take some time of enduring.

Finally, in 2013, life started getting a little easier for the hotel and resorts on Sanibel.

“We started to really feel the impact in 2013, when we realized the occupancy was climbing and we didn’t have to sacrifice rate to gain that occupancy share,” Lai said. “We built no new buildings during the crash and we had lost some hotels and lost condos which were once rental, turn residential. “So that created a compression of sorts, by gaining occupancy share without having to give up rate.”

Now, there are new customers enjoying the rise of the economy, especially the international traveler, which also helped in lean times. International travelers tend to travel to the U.S. more when the dollar is weaker, because their money is worth more.

But Sanibel is seeing an increased number of international guests, especially from China, which boasts the largest population in the world.

“Business actually has been better than the early 2000s,” Shuff said. “There have been more European visitors, due to the great marketing job by the Visitor and Convention Bureau and the Chamber to the European and South America countries. We have seen a whole better international market.”

The industry is coming off its best two years ever, with 2013 being the tops. And it isn’t looking like it’s going to tail off, either.

“This year, gas prices have been a factor,” Lai said. “But there also has been some strong marketing efforts from our VCB and Chambers, so it’s been more of a cohesive industry. Five years ago, we didn’t have a hotel association. So we are seeing more of a concentrated effort by the industry as a whole.”

Lai believes the hotel and resort industry on Sanibel is a vital one for the island to maintain its current success rate of attracting people over the Causeway. The hospitality industry provides one in five jobs alone in Southwest Florida and the tax base is helped, as well.

The bed taxes these businesses pay also aid in helping keep the coastline pristine and attractive to guests.

“Five percent of the bed taxes collected go back to Lee County and 25 percent of that goes to beach and shoreline re-nourishment and protection,” Lai included. “That’s a big deal. Look at the way we’ve been able to keep the Causeway Islands clean and in their natural state, that’s all part of the bed tax. When the oil spill happened, that bed tax paid to get the message out that the beaches of Fort Myers and Sanibel are intact and still beautiful.”

The bed tax also helped sports fans enjoy their time more in Fort Myers. A good portion of the Hammond Stadium remodeling, which houses the Minnesota Twins’ Spring Training headquarters, was paid by bed taxes. That ensured the Twins would stay in Fort Myers, which is a big draw to the area during the Spring Training months.

The pulse is strong on Sanibel and Captiva, but it’s all still predicated on the consumer and their willingness to spend their hard earned cash in paradise. But it’s looking good nonetheless.

“Our industry is based so heavily on consumer confidence,” Lai said. “We believe this will be another strong year, and looks to be even stronger than 2014. We are seeing some good trends, but it’s a very fragile industry. One natural disaster, gas prices going higher, one election year or the strength of our dollar, all affect the our future.

“But the future of Sanibel is great. We have great community leaders protecting our natural assets and that’s what brings people here.”