Miami’s hotel market got a boost from hurricane-damaged competitors. Will that continue?

Revenue per available room was up nearly 16% for the first two months of 2018

TRD MIAMI /
Mar.March 27, 2018 06:00 PM

Miami skyline (Credit: Pixabay)

Miami’s hotel market experienced a rise in occupancy over the last six months following devastating hurricanes that tore through the Keys and the Caribbean, rendering those destinations off limits to vacationers.

An analysis from hotel research firm STR tracked that growth from September through February, looking at occupancy, revenue per available room and demand. And as those storm-battered islands continue to rebuild, tourism has started to return, siphoning some of that gain from Miami’s hotel industry, the data shows.

In early September, Hurricane Irma battered the Caribbean islands of Barbuda, Saint Martin, the Virgin Islands and others, eventually making landfall in the U.S. on the island community of Cudjoe Key in Monroe County.

The Florida Keys took the brunt of the damage from Irma, sparing Miami-Dade, Broward and Palm Beach counties from major structural damage. And only 10 days after hitting the Keys, Hurricane Maria reached Puerto Rico, causing widespread devastation.

Since then, a number of hotels in South Florida reported increased bookings.

“There’s definitely a domino effect and South Florida is a beneficiary, even though we have some rooms out of inventory as well,” said Scott Berman, principal at PricewaterhouseCoopers. From a group bookings perspective, “Puerto Rico’s loss is our gain,” he said.

Markets like Hawaii and Arizona are also picking up group business that would have typically gone to some of the islands hit by hurricanes last year, added Berman, who heads the hospitality and leisure division at PwC.

Berman is bullish on the Miami hotel market this year despite the challenges the industry is facing, including a growing supply of short-term rentals. “We’re by no means complacent, but I think generally there’s an upbeat tone amongst the hotel community,” he said.

In the Miami region, occupancy, revPAR and demand saw double-digit increases in the immediate months following the storms.  In October, occupancy was at 74.5 percent, up 11.2 percent from the previous year. That month, revPAR, which is typically used to gauge the market’s health, rose 13.4 percent to nearly $121. Demand also jumped by 11.2 percent.

Since then, that boom has slowed down. STR’s most recent data shows occupancy for the first two months of this year increased 5.3 percent to 84 percent. RevPAR is up 15.8 percent to nearly $207, and demand rose more than 5 percent compared to the first two months of 2017. Revenue jumped 15.6 percent to nearly $668.5 million.

Outside of the boom caused by the hurricanes, Jan Freitag, STR senior vice president, is expecting “an OK year for Miami hoteliers” in 2018. The Miami market’s revPAR averaged $144 in 2017, up only 0.7 percent.

“We expect the fourth quarter performance that lifted results in Miami to not be repeated going forward and it will make comparables in Q4 2018 very hard,” he said.

The Caribbean, meanwhile, has slowly been coming back. In the beginning of 2018, occupancy there fell about 2 percent to 70.6 percent, revPAR dropped 2.7 percent to $169, and revenue declined by 3 percent to $2.5 billion.

The Keys are also still experiencing a decline in demand into the new year, according to STR. About 28 percent of the area’s 11,000 hotel rooms remained closed as the holiday season got under way.

Cheeca Lodge & Spa, a 214-key, 27-acre resort in Islamorada, is expecting to reopen on Friday after completing $25 million in renovations and repairs from damage caused by Irma. When it opens, about 66 percent of Islamorada’s 1,300 rooms will be back online following the hurricane.


Related Articles

arrow_forward_ios
Clevelander South Beach

Party’s over: Clevelander South Beach closes after employee tests positive for Covid

Party’s over: Clevelander South Beach closes after employee tests positive for Covid
Lennox Miami Beach

Lennox Miami Beach hotel exec sues father-in-law for ousting him: lawsuit

Lennox Miami Beach hotel exec sues father-in-law for ousting him: lawsuit
citizenM founder Rattan Chadha, Russell Galbut and a rendering of 1212 Lincoln

CitizenM buys hotel portion of Crescent Heights’ 1212 Lincoln project

CitizenM buys hotel portion of Crescent Heights’ 1212 Lincoln project
1 Hotel South Beach (Credit: Google Maps)

Starwood Capital affiliate sues 1 Hotel & Homes South Beach condo association for trademark infringement

Starwood Capital affiliate sues 1 Hotel & Homes South Beach condo association for trademark infringement
Ziel Feldman and Richard Branson with renderings of the Shore Club (Credit: Getty Images)

The breakdown: Inside Virgin Hotels’ $330M vision for South Beach and how it vanished

The breakdown: Inside Virgin Hotels’ $330M vision for South Beach and how it vanished
Al Patel, President of Baywood Hotels and 1101 Northwest 57th Avenue (Credit: Google Maps)

Baywood scores $31M loan to build hotel near Miami International Airport

Baywood scores $31M loan to build hotel near Miami International Airport
BridgeInvest Alex Horn, Variety Hotel at 1700 Alton Road in Miami Beach

Lender files to foreclose on new South Beach hotel

Lender files to foreclose on new South Beach hotel
Diego Colmenero, Charlie Porchetto and a rendering of the hotel

Urbanica scores approval for new hotel in North Beach

Urbanica scores approval for new hotel in North Beach
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...