Miami's Hotel Industry in Growth Mode
By Boaz Ashbel Managing Director, Aztec Group | May 08, 2016
The Miami hospitality industry is performing stronger than ever with occupancy rates approaching 80 percent and average daily rates (ADRs) on the rise. Since January of 2015, 2,800 hotel rooms have been delivered and approximately 2,000 additional rooms are expected to be added this year.
A factor fueling the major spike in hotel activity in Miami is the rise in tourism trends – with record levels of travelers visiting Miami-Dade for its world-class beaches, shopping, vibrant nightlife and lively arts scene. Major local attractions like the AmericanAirlines Arena, Marlins Park, Jungle Island, Lincoln Road, Ocean Drive, as well as shopping destinations such as Bal Harbour Shops, Dadeland Mall and Aventura Mall, continue to entice visitors to Miami by the millions. In 2015, total passenger traffic at the Miami International Airport (MIA) was 44.4 million, an increase of nearly 9% since the previous year, of which domestic visitors jumped by 11% alone to 23.1 million.
Moreover, the influx of trendy, mixed-use and retail projects recently completed or under construction in Miami, including the Design District, Brickell City Centre, and Miami Worldcenter, is also driving forces in inducing new hotel demand to the area. South Florida has become a world-renowned destination and gateway to many countries. As a result, it is somewhat cushioned from many of the negative external forces that other gateway markets like New York City, Los Angeles and Chicago may face.
In line with increasing demand, the region is making significant investments to upgrade infrastructure and transportation – from the imminent debut of the high-speed All Aboard passenger train service connecting Miami and Orlando and added Metrorail routes, to PortMiami renovations and the opening of the Port Tunnel. There are also an increasing number of cruise lines anchoring their mega ships in Miami and additional non-stop international flights at MIA, including from Vienna, Istanbul, London, Munich, Paris, Zurich, Helsinki, Berlin and Cuba. A possible non-stop flight from China is also in the works.
As a top destination for travel, both domestic and international, Miami's hotel sector naturally thrives. According to Smith Travel Research, Miami ranks 4th in ADR and revenue per available room (RevPAR), and 8th in occupancy within the top 25 markets in the U.S. Subsequently, hotel developers and operators are flocking to Miami for a piece of the pie. Recent development has been focused on two types of hotel product: boutique-style and upscale. Both of these hotel types serve local demand well - millennials with a thirst for travel and unique accommodations, and price-sensitive international travelers.
Along these lines, new construction in the select-service category outpaces the rest. For example, the recently opened Hyatt Place Hotel at MIA has carved its own niche; its location, amenities, and mid-range price point is appealing to travelers looking for a comfortable, convenient and stylish place to stay within close proximity to the airport. The new hotel offers 135 rooms, 24-hour airport shuttle, free Wi-Fi, complimentary breakfast, meeting space, 24-hour state-of-the-art gym, and stylish outdoor pool and deck – all features that travelers today desire. Meanwhile, off Brickell Avenue in Downtown Miami, the Latin American hotel brand, Atton Hotels, is getting ready to open its first U.S. hotel. With a wide assortment of amenities, this 275-key hotel will attract both leisure and business travelers with its 969-square-foot suites and fully-equipped fitness center to its on-site Latin American restaurant and rooftop pool and bar.