September 7th, 2007
Coming out of the dark; after enduring a post 9/11 meltdown, Miami’s tourism market gears-up for a winning 2004, complete with solid bookings, more luxury hotels—and a new take on the summer market - Hospitality
Oh, what a difference a year can make. After taking a not-so-subtle beating at the hands of low occupancy rates, reduced bookings and the exhaustion of anticipation, there is finally relief in sight for Miami-Dade’s tourism industry. Looking toward 2004, industry experts and hoteliers are optimistic–and there’s nothing cautious about it.
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“The near future is certainly positive for Miami,” says Richard Millard, CEO of Miami-based Tecton Hospitality, a hotel owner and management company, who predicts the tourism market will pick up “a great deal” in the coming months. And he is far from alone. “We have a nice little window with the economy recovering, no new supply and a general lift in the market,” agrees Gregory Rumpel, senior vice president of Jones Lang LaSalle Hotels.
In terms of product, the December triple opening of the Ritz-Carlton in South Beach, the Four Seasons on Brickell, and the adjacent Conrad Miami, added another layer to the crop of luxury hotels that have appeared in the last few years. Far from being too much of a good thing, says Greater Miami Convention & Visitors Bureau (GMCVB) president and CEO William Talbert, the additions will add to the lure of Miami as a destination. “I have been here 35 years and this is the best thing that has ever happened to us,” Talbert says. “The bar gets raised and it has a spin-off effect. The product attracts clients.”
The new luxury hotels are a coup for Miami, agrees South Florida-based Chase Burritt, managing partner of Burritt Associates, a hotel marketing advisory firm. “From a consumer’s perspective, it’s a great thing,” he says. “They have more to pick from, probably at pretty good prices, relative to what they would in Boston, Chicago or Atlanta.”
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The time was right for the South Beach-based Ritz to enter the luxury market, says Ezzat Coutry, the company’s senior vice president who oversees its hotels in the Southeast, Caribbean, Central America and Mexico. Some nights at the South Beach Ritz are already sold out in January and March, says Coutry, who cites Smith Travel numbers to illustrate the booming Miami market. Those statistics show Greater Miami led all major US markets in 2003 (as of October), with 7.1 percent growth in room revenue; Miami Beach, weighing in at 12.6 percent, had the highest growth of any destination.
What’s coming for 2004 is a new effort by the GMCVB to sell Greater Miami year-round, not just in winter’s high-season. There is even talk of putting on a July-based “Miami Fashion Week,” and other like events to lure visitors during summer’s steamy months. “One of my top objectives is to improve tourism in the low season,” says R. Donahue Peebles, this year’s chairman of the GMCVB. “I think it’s critical to our economic well being that we have demand in the summer.”
“Sometimes we become too complacent and think it is too hot and nobody wants to come here,” says Jorge Gonzalez, general manager of Miami’s 5-diamond Mandarin Oriental on Brickell Key, and chair of the GMCVB marketing committee. “But there are people who go to Palm Springs and New Orleans and hotter places. I think sometimes they are just excuses we give ourselves.”
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For his hotel, Gonzalez is trying different approaches. One that is working–to the tune of 5 percent of bookings–is pushing the Mandarin’s luxurious spa. Although the Mandarin sees 60 percent business bookings and 40 percent leisure travelers, the hotel is positioned as an “urban resort for leisure with a beach and spa experience.” The result? Leisure market growth of 20 percent in 2003 compared to 2002.
One strategy the Mandarin did not pursue was rate reduction, which Gonzalez says would have been a temporary “bandaid.” Fontainebleau Hilton spokesperson Lisa Cole agrees, concluding that “rate slashing benefits no one.” What the Fontainbleau has done is go after more family business–which dovetails with the summer marketing push–investing in such add-on attractions as their $5 million water theme park for children.
For hotels that cater to the business traveler, such as the Hyatt Regency Coral Gables and the Hyatt Regency Miami, business is on the upswing as well. Victor Lopez, divisional vice president of Hyatt Hotels and Resorts, oversees the Hyatt Regency Coral Gables and Hyatt Regency Miami. He anticipates 4 percent to 5 percent growth for 2004 over 2003. “Bookings are really strong for the first few months of the year,” Lopez says.
Loews Miami Beach Hotel is anticipating that 2004 will be “slightly better” than 2003 based on the fact that advanced bookings in the meetings and convention markets are slightly ahead of last year’s pace, says Debbie Castillo, director of sales and marketing. In the first quarter 2004, Loews’ individual leisure traveler bookings are also ahead of first quarter 2003, Castillo adds.
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One positive indicator is an expected increase in 2004 bookings–and slightly higher pricing–for Miami’s cruise lines. With nearly 40 percent of vacationers who arrive at Miami International Airport boarding cruises, the industry can mean the difference between area hotels sinking or swimming. Anne Kalosh, U.S. editor for Seatrade Cruise Review, says several new ships serving Miami and Port Everglades will enter service in 2004, adding even more berths for passengers in search of the cruise experience through South Florida’s ports. “This means more business for local tour operators, retailers, taxis, and restaurants,” says Kalosh, “because passengers spend the day in port as part of their cruise instead of just flying in and out to join or leave the ship.”