Kathy Conroy, MAI, and John Lancet, MAI, Managing Directors of the HVS Consulting & Valuation practice in Florida, presented to a capacity crowd of more than 100 operators and developers last month at the South Florida Hotel Market Connections event held at the Wyndham Shelborne Hotel on Collins Avenue in South Beach.
“In assessing the statistics regarding hotels under construction as well as hotels in the final planning stages, it is important to note that the majority of inventory entering the combined Downtown Miami and Brickell hotel submarkets are in the upscale and upper midscale categories – which we really need,” states Conroy. “These are the Courtyards, the Hampton Inns and similar property types which will offer a different price point for visitors looking for something other than that luxury experience in this market.”
Conroy adds, “The current allocation of the 1,000 plus rooms under construction and/or in the final planning stages in this submarket, provides for a fair distribution among the various quality tiers. I feel good about this because not everyone can stay in luxury hotels and this allows for alternative options.”
HVS in Florida reviewed startling numbers regarding the occupancy, average daily rate (ADR) and revenue per available room (RevPAR) statistics for South Florida, (Dade, Broward, Palm Beach counties) as compared to both the entire state of Florida and the United States overall:
- Annual occupancy for Miami-Dade and Broward counties in 2014 was 20% greater than the average for the USA, with Palm Beach county ending the year 14% greater than the average for the country.
- The 2014 Miami–Dade county RevPar was almost two times the average for the country while Broward county and Palm Beach county RevPar metrics were 33% and 55% greater, respectively, than the USA average.
- The 2014 average RevPar for the entire state of Florida was 17% greater than the approximate $74 RevPar achieved by the U.S. hotel industry.
- The 2014 ADR achieved in Miami-Dade county was 61% greater than the average for the U.S.
“The South Florida statistics were so fascinating to me that I was moved to investigate what was driving those indicators,” added Conroy. Below are indications of what Conroy terms “the fundamentals” which foster robust occupancy, average rate and RevPAR metrics:
- 1 in 3 visitors to the state of Florida, visit South Florida;
- 2 of 3 foreign visitors to the state of Florida, visit South Florida;
- On the heels of an aggressive expansion plan, the Ft. Lauderdale airport welcomed 24.6 million passengers in 2014, or only 2.4 million passengers less than LaGuardia, and continues to aggressively court new airlines and/or new routes with its existing airline partners.
- The cruise industry is a significant contributor to the strong hospitality and tourism economy in the region; Cruisers have proven that they visit South Florida before or after the cruise and use the local hotels; in 2014, a combined 8.9 million cruise passengers came through Port Everglades and Port Miami. No other cruise port areas come close to this astronomical passenger count.
As Lancet also reiterates, “A big part of why South Florida‘s metrics are so much better than the state itself or even the country as a whole is because of the fundamentals – the airport passenger counts, the cruise port usage, the economy, and visitation numbers. They are all strong.”
For more information about hospitality development specifically in the Greater Miami and South Florida region, contact Kathy Conroy at firstname.lastname@example.org, or at (305) 378-0404.
Leora Halpern Lanz