Miami Hotel Rebound: 'We're Blowing 2019 Out Of The Water'
The recovery of South Florida's hotel industry is stronger than anyone could have imagined in March 2020 when the coronavirus pandemic was bearing down on the world.
Nationwide, Miami had the largest growth in average daily room rates (up 44.7% to $225.14) and revenue per available room, or RevPAR, (up 30.7% to $152.45), hotel data collector STR said in a report released Thursday comparing data from the week of July 4-10 to data from the same week in 2019, substituting that year for 2020 because of the pandemic's effects deviating from a normal year.
"We're blowing 2019 out of the water," said Miami hotelier Robert Finvarb, whose portfolio includes more than a dozen hotels.
Typically, demand dries up around Easter as Miami gets hot, rainy and muggy. But this year, the season never ended, Finvarb said.
The performance seems stunning in light of the fact that business travel hasn't returned to normal levels, foreign travelers haven't yet returned en masse and Miami's cruise ships haven't been sailing. Late-night behavior that made national headlines during spring break has largely dissipated, Finvarb said, though there are still "pockets of craziness."
Finvarb chalked up the booming business to pent-up demand for leisure destinations after a year of coronavirus-related lockdowns, as well as the ease with which Americans can get to Miami compared to similar beach destinations in the Caribbean or Latin America.
Riviera Point Invest + Develop CEO Rodrigo Azpurua opened the $42M, 157-room Radisson RED Miami this month with what he thought was an aggressive expectation: stabilizing it at 85% occupancy after six months, he said.
"Since opening, with less than 30 days in business, we are stable at over 60% occupancy, and in the weekend, we have hit 90% occupancy," he said. "Regarding the ADR, we are 15% above of our aggressive forecast from the beginning of the year. Miami is absolutely the best city, with affluency, great attraction and over 60% of the population already vaccinated."
Driftwood Capital CEO Carlos Rodriguez said that since May, five hotels in the firm's portfolio have beaten 2019 levels for RevPAR, in some cases by as much as 20% to 30%.
"In South Florida, we own two brand-new hotels — the Tru/Home2 Suites in Fort Lauderdale at Flagler Village and the Canopy West Palm Beach — which both opened last year during the pandemic, so we don’t have any prior-year data for comparison purposes, and both have seen robust demand growth since this spring," he said.
Rodriguez said Tru has enjoyed a compound monthly growth rate for RevPAR of nearly 30% through June, and rate growth at the Canopy has also exceeded expectations, "with the most recent months since spring break commanding a $40 to $50 premium over expectations."
Rodriguez said he is raising money for co-investment hotel opportunities faster than ever before, and it isn't confined just to South Florida.
"We purchased a hotel in Dallas, the Hilton Southlake, in December and raised $9M via crowdfunding in just three days," he said. "We are seeing a lot of multifamily investors gravitating to the hotel sector now because the cap rates are much higher. There’s just incredible momentum in this space now."
STR found that among the Top 25 Markets, Norfolk/Virginia Beach saw the highest occupancy increase (up 3% from 2019 to 80.5%), while Minneapolis experienced the steepest occupancy decline (down 34.1% to 52.6%). The largest RevPAR drops were in San Francisco/San Mateo (down 55.2% to $89.11) and Boston (down 47.6% to $94.03), the agency reported.
The coronavirus pandemic isn't over, and the delta variant has prompted fears of additional lockdowns, with some companies pushing back return-to-office timelines. Los Angeles County began requiring masks indoors as of Saturday. But Finvarb said he wasn't worried.
"LA's a complete joke," he said. "They're destroying their local economy."
