Despite the hotel industry anticipating a slowdown, Miami is expected to overcome headwinds.
A lot of uncertainty revolves around the outlook for the summer, said David Whitaker, president & CEO of the Greater Miami Convention & Visitors Bureau. “The good news is, if we’re going to face a period of uncertainty, isn’t it encouraging to come off and have some momentum, some wind at our back.”
January through April, said Mr. Whitaker, Miami-Dade County was number one in the top 25 US destinations in hotel occupancy.
“We traditionally do very well in this period,” he said. “We’ve always been in the top one, two or three. I think to keep it through April was really the most encouraging. Normally you will start seeing somewhat of a slowdown in April, and we were able to extend the first three months of the year and have the first four months of the year be on top. That’s great momentum. That’s a great affirmation of the popularity of the destination.”
Additionally, he said, this was accomplished “while maintaining the highest average daily rate, because you could fill every room if you sold them for $50 a night, right? So it’s important that we are a high-value destination. We have a high price point and so that people who are purchasing in Miami know it’s an investment, but they’re seeing the return on investment with the experience that they’re having.”
The county led the nation in the first four months of the year. However, May was a telling month as it reflected signs of headwinds.
Although the final numbers for international airline passenger arrivals aren’t in yet, it’s estimated to be down roughly 5%, he said. “We’re not used to being down. We’re used to growing. We’re used to leading. So to see a decline, even if slightly, to see a slight decline in international arrivals gets your attention. Now it’s just one month – going to look at the next five or six months to really make any kind of assessments – but that is one of the first signs.”
Year over year, hotel demand was up 14 out of the first 18 weeks of the year, he said.
“Now in May,” said Mr. Whitaker, “for the first full four weeks of the month of May … we were down roughly 3% [year over year]. May was that first telling month that we’re not necessarily in a growth phase, and right now, in fact, we’re hopeful for somewhat stability as we move toward the uncertain months and the slower, traditionally, months of the summer.”
Mr. Whitaker shared that what he is most encouraged about in May is that the local average daily room rate did not decline.
“Our hotels locally didn’t overreact – didn’t overreact in terms of ‘It’s slowing down. We’ve got to lower prices,’” he said. “Supply and demand. Traditional look at supply and demand … and once one hotel starts doing it, it becomes infectious because it’s a very competitive marketplace. I’m really encouraged, and I think it speaks to the strength and reputation of the destination that we haven’t entered a period yet where our hotels are having to lower their rates.”
There is encouragement, he said. “We have a barometer called advanced reservations. Our hotels report out on how many reservations they have for the next several months, next 90 days.”
As Mr. Whitaker shared via email, for June, July and August, there are 1,853,443 rooms reserved compared to 1,685,879 in the same period last year. These won’t be the final numbers as advanced reservations represent a third of all reservations. However, it does represent a 9.9% increase over the same 90 days of June, July and August last year.
“We sense that as a good barometer, but we still know that there’s some softness,” he said. “As an example, for the month of July, when we look at each week, the second and third weeks of July, right after July 4 holiday, those advanced reservations are pacing slightly down from last year, so there’s a little bit of softness in July. And so that’s something that we’re going to continue to monitor, hotels will monitor.”
In August, two major conventions are coming, he said, bringing business in what has historically been a slower period.
“Aug. 1-7 we are hosting the Fraternal Order of Police National Conference at the Miami Beach Convention Center,” Mr. Whitaker shared via email, “bringing roughly 5,000 delegates from police groups around the country (almost 10,000 room-nights contracted with host hotels).”
From Aug. 24-28 “we are hosting Connect Marketplace – a trade show … and event organizers put on by our largest trade show partner – Informa, bringing 2,500 attendees.”
Despite the softening in the market, the county is expected to persevere.
“I think it’s a clear indication that we’re going to go into a soft period, a softer than normal period,” said Mr. Whitaker. “It’s a historically slow time, and we’re … drifting back to the past, where the summer has seen a slight downturn. But we’re encouraged with the major conventions that we’ve got in the books. We’re encouraged with the relative success of some of our international markets, where we haven’t seen the big declines that other markets are seeing. And so we’re focused, but we feel that we’re going to be able to get through this as a destination.”
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