Miami Beach hotel bookings sag with leisure market nationally
Written by Janetssy Lugo on November 12, 2024
Miami Beach's hotel booking levels have softened along with the rest of the leisure market in the US.
"At a high level, what we see [is] a trend that started actually last year," said Michael Stathokostopoulos, senior director of hospitality analytics at CoStar Group, which monitors the hotel industry nationally, "most major hotel markets in the US with high exposure to corporate and group business and high exposure to international inbound travel from abroad, they have been doing better the last year and a half."
On the other hand, he said, performance and rates in high exposure to leisure areas and domestic leisure "have been doing worse compared to the other markets."
Mr. Stathokostopoulos shared that this year markets such as New York, Boston, Seattle, and Washington, have been "doing great compared to other markets like Florida like Tampa, Orlando, Miami, or other leisure markets like Phoenix, Los Angeles, San Diego. They have been performing less strong compared to the urban downtown centers."
Even when looking at Miami as a whole, he said, the downtown area has been doing better than the beach area – a theme seen throughout the US.
Looking specifically at Miami Beach, said Mr. Stathokostopoulos, "performance is more or less flat and driven mostly by a little bit of a loss of pricing power because ... more people travel internationally, less people are coming from international to the US in general, and hotels have been okay. They did great following the pandemic for a couple of years, but obviously, performance is stabilizing."
Additionally, international destinations are cheaper to travel to, he said. High inflation has also been pushing hotel rates up in the last two years.
As shared via email by CoStar, the year-to-date average daily rate in September 2024 for Miami Beach hotels was $283.38 and in pre-pandemic September 2019 the average daily rate was $230.98.
On average, Miami Beach has the same number of rooms as it had in 2019, said Mr. Stathokostopoulos, but demand is less, which is why there is a loss of occupancy when compared to 2019.
The year-to-date occupancy rate in September for Miami Beach hotels was 72.6% compared to 77.2% in September 2019.
Cruising has also impacted the conversation as individuals are substituting for hotel experiences by cruising.
"Cruising is 30% up," said Mr. Stathokostopoulos, "compared to 2019 pre-pandemic, and also with alternative accommodations." Additionally, as workers go back to the office, people are traveling more for work and attending conferences.
"All the downtown areas in major metropolitan cities have been doing much better than resort areas," said Mr. Stathokostopoulos. "This has been lately, because coming out of the pandemic, all of these resort areas were growing much faster than urban areas. Airlift was not there, so people were not traveling abroad as much. That happened just after the pandemic."
All the major hotel markets with high leisure components, he said, were doing good for "a couple of years, and now ... basically, that performance started normalizing."
As a city of the metro Miami, said Mr. Stathokostopoulos, it has a positive performance compared to other markets in Florida where they have a negative performance.
"Miami has had and has some good events this year that is driving performance," he said. "Obviously, the most recent one, Taylor Swift.... They had Formula 1, obviously, they have Art Basel. They had over the summer time Copa America. So all of these events have boosted a little bit performance, more so in bookings, less so than in rate."
