Too many rooms at the inn? Q1 hotel occupancy falls in SoFla amid growing supplyMay 14, 2019
South Florida hotels reported lower first-quarter occupancy rates, as thousands of new rooms hit the market. Still, total industry revenue edged slightly higher, according to hospitality industry monitor STR.
STR data for South Florida shows that the tri-county area had about 4,400 more hotel rooms available in the first quarter than in the same period last year.
The boost in supply comes amid growing competition from short-term rental companies like Airbnb.
South Florida’s first-quarter inventory of room-nights (or the number hotel rooms multiplied by the number of days from January through March) increased by about 400,000.
Miami-Dade accounted for most of that first-quarter increase, with an additional 225,396 room-nights, followed by Broward with 154,694 more and Palm Beach with another 19,381.
“Over the last couple of years, the new supply that has come to Miami has been mainly middle-market or economy [class], a lot of hotels by the airport, a lot of hotels out in Doral,” said Max Comess, a managing director at the Miami office of HFF.
In addition, “a lot of [hotel] properties in the Caribbean have opened, and I think that is affecting us as well in a significant way,” said Wendy Kallergis, president and CEO of the Greater Miami & The Beaches Hotel Association.
Hotel occupancy rates in Miami-Dade County averaged 83 percent in the January-March period, down from 85.5 percent in the same period last year.
First-quarter occupancy declined less than a percentage point to 83.5 percent in Broward and 82.9 percent in Palm Beach.
Last year’s higher first-quarter occupancy rates reflect hurricane damage in late 2017 that closed hotels for months in the Florida Keys and the Caribbean, diverting some tourists and business travelers to South Florida instead, said Paul Weimer, senior vice president at CBRE Hotels. “Miami didn’t have much damage,” Weimer said. “A few of the hotels were closed. But for all intents and purposes, it was up and running.”
The average daily room rate in Miami-Dade dropped 3.5 percent in the first quarter to $207.66, but total revenue per available room fell just 1 percent to $250.11.
In Broward, the average daily room rate in the first quarter fell 5.1 percent to $156.27 as revenue per available room fell 4.4 percent to $187.09.
In Palm Beach County, the average daily rate in the first quarter was nearly unchanged at $211.56, up 0.1 percent from last year, and revenue per available room was 0.9 percent higher at $255.29.
STR also reported that total hotel revenue in the first quarter increased marginally in all three counties, rising 0.9 percent to $1.07 billion in Miami-Dade, 0.3 percent to $454 million in Broward and 1.3 percent to $323 million in Palm Beach.