Friday, April 24, 2009

Tourists Staying Home and Away from South Florida

From the Desk of King in Miami

Article courtesy of the Miami Herald

The peak of tourism season produced a valley this year, with room rates down by double digits and vacationers staying home.

A new report from Smith Travel Research shows March was a disaster for hotels -- room rates dropped 18 to 22 percent compared to a year ago, while occupancy either fell or stayed flat.

The statistics end any hope of South Florida's busy tourism season rescuing hotels from a global economic crisis that has travelers taking shorter trips and insisting on bargains.

But a new report predicts a quick turnaround, with the tourism decline bottoming out this year and Miami-Dade's room rates growing a healthy 7 percent in 2010.

''Miami historically has recovered nicely out of these things,'' said Gregory Rumpel, a vice president of Jones Lang LaSalle Hotels, which produced the report.

As the economy recovers, travelers ''may not take that European vacation out of the gate . . . But they're taking a holiday. And they'll probably head to the sun,'' Rumpel said.

The Jones Lang LaSalle report predicts Miami-Dade hotel rates will top last year's levels by 2012, with three years needed to erase the 15 percent decline forecast for 2009.

Actual per-room revenues -- a key industry metric -- will take longer to recover, thanks to the flood of new hotel rooms brought on by a construction boom.

Rumpel said that number would probably pass 2008 levels by 2014.

A return to higher rates next year would follow the pattern of South Florida's post-9/11 tourism plunge, when hotels spent several years clawing back the price discounts they offered after the terrorist attacks.

Along with the short-term fiscal crunch that comes with lower revenues, hoteliers and tourism officials worry the downturn will do lasting damage to Miami's status as one of the country's priciest destinations.


''We have to be careful about not retraining the customer with these discounted rates,'' said Jessica Goldman, who oversees South Beach's The Hotel and Park Central hotel for her family's real estate company. ``We experienced this after 9/11. People were giving away the rooms. It took two years, if not more, to be able to even consider getting better rates.''

The average price for an overnight stay in Miami-Dade dropped 18 percent in March.

That's traditionally the busiest month in South Florida's winter vacation season, which winds down between Easter and Memorial Day.

The $171 average rate was the lowest for March since 2005.

Broward, a smaller hotel market, saw a similar rash of discounting.

Rates were down 19 percent compared to a year ago, but the $130 average nightly rate still left beds empty.

Occupancy dropped 10 percent in Broward and 13 percent in Miami-Dade.


''There was very little new business this year,'' said Joseph Van Enron, owner of Liberty Suites in Dania Beach and president of the Dania Beach Tourism Council. He said his hotel's occupancy held up thanks to repeat visitors, but he had to cut rates to get the business.

''It's all about price,'' he said.

Tourism officials had hoped what seemed like a busy spring break would end a worsening decline for the region's largest industry.

But bargain-seeking college students failed to boost rates or fill enough beds to make up for a global economic crisis that has vacationers spending less or staying home.

Revenue per room dropped 29 percent in Miami-Dade compared to March 2008. That's slightly worse than February's 26 percent decline, and the biggest March drop this decade.

Hotels in the Florida Keys suffered in March, too, though the bargains kept rooms full. Rates fell 22 percent to $202 a night, but occupancy held steady at 80 percent, down only 2 percent from a year ago

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