It’s a rainy afternoon in South Beach and tourists who have braved the weather to eat at the Miami Grill on Washington Avenue are helping themselves to sprays of mosquito repellent placed on the counter by staff. The restaurant is in the heart of the city’s “Zika zone” and manager Brian Hicks is wondering if his customers will continue to come.
What worries him, and many others in the Miami Beach business community, is any future economic fallout from this summer’s outbreak of the virus. With the number of confirmed Zika cases continuing to rise, and the peak winter tourism season barely two months away, fears are growing that publicity over the mosquito-borne disease could put visitors off and deliver a hard hit to the city’s $24bn tourism industry.
“My question is how big an impact can we expect from this?” said Hicks, who has joined numerous other businesses and hotels in Miami Beach and Wynwood, the other Zika-affected neighbourhood of greater Miami, in providing free mosquito repellent for customers’ use.
“In Wynwood there’s been a big effect, people aren’t willing to go out there and put themselves at risk, not just people who are pregnant or have a health risk.
“Obviously it’s going to impact us in some way. The health concern is there but what’s going to happen this next season, to the hotels, the restaurants and entertainment?”
As of Wednesday night, the Florida department of health had recorded 47 non-travel-related infections of Zika, and on Thursday morning health officials confirming for the first time that mosquitoes tested in Miami Beach are carrying the virus. Days earlier, the same day as health managers confirmed the latest locally acquired case in Miami-Dade, bringing the county’s tally to 34, local and state officials held a public meeting in Miami Beach to take questions from worried residents and business owners.
But as the forum’s organiser, state representative David Richardson, explained, it is too early to predict the extent of the damage that could be caused if publicity over Zika causes a significant number of Miami’s annual 15 million visitors to stay away.
“We’re in the slower season right now [and] we don’t know exactly what that economic impact will turn out to be, but the area has certainly been impacted,” he said. “We have people calling, tourists that are calling hotels and cancelling reservations.
“The area where we are, zip code 33139, is the third largest collecting area in sales tax for the state of Florida after the theme park areas of Orlando, so we contribute a large amount of revenue to the state. This is going to have an impact. But I’m hopeful that we’ll be able to deal with it and wrap it up quickly.”
Richardson said he hopes more money to fight Zika will come Florida’s way if Congress approves a $1.1bn federal funding bill next Tuesday. That would release funds to help pay for continuing mosquito-spraying in Miami Beach.
Yet according to analysts, some kind of financial downturn is inevitable. Unlike the more niche destination of the arts district of Wynwood, where several businesses have closed temporarily and restaurant bookings are down, mainstream tourism is the lifeblood of Miami Beach, and any drop is keenly felt.
Hilary Sutton, a credit analyst at Standard & Poor, warned in a report last week that the county’s AA bond rating could eventually be threatened, and the question was not if tourism revenues would be affected “but by how much”. It echoed an earlier warning from Moody’s that noted no immediate risk but that “if the guidance expands to include the entire city or remains in effect through the fall and into the high season of December to March, these revenue streams could experience declines”.
Already, alarm bells are ringing in the office of Miami-Dade’s mayor, Carlos Giménez. In a recent letter to Florida’s governor, Rick Scott, asking him to consider an economic rescue package and use state funds to reimburse the county for the $6m spent on spraying so far, Giménez pointed to a possible drop in sales and hotel tax revenues.
Scott Berman, a leisure and hospitality analyst at PwC, says officials are right to be worried, although he says other factors, such as the strong dollar, rival distractions such as the Olympics and an increase in the number of available rooms muddy the picture.
“I don’t dispute the position that there will be an economic impact, the question is how severe will it be, and more importantly how lasting will it be,” he said. “If there’s any silver lining, the next 60 days are traditionally the slowest for the tourism sector, it’s when owners and operators get ready for the winter season.
“If we’re still talking about this in December and January, clearly the impact will be fairly deep and it will take some time to work through the analytics to see what that figure is. But I don’t disagree that it’s inevitable.”
According to Rolando Aedo, chief marketing officer of the Greater Miami Convention and Visitors’ Bureau, anecdotal evidence suggests cancellations are limited so far.
“Hotels have told us they’re not seeing large-scale cancellations, they’re in the hundred room-night range so are relatively small,” he said.
“Our concern is what we don’t know rather than what we do, but our message is that not only are we open for business, it’s business as usual. We’ve faced these kind of challenges before in Miami with H1N1 flu, Sars and bird flu.”
Ultimately, said Mayor Philip Levine of Miami Beach, eradicating the virus from the city will also take care of any economic worries.
“People ask me all the time, ‘Are you concerned about the business impact on the community?’ Of course I’m concerned. The community’s concerned,” he said. “But what we’re concerned about more than that is the safety, health and wellbeing of our residents. That’s what we’re focused on.
“The last thing I’d want to be right now is a mosquito on Miami Beach.”
