Hot Miami area experiences pick-up of occupancy, rate

Hotel & Motel Management, April 19, 2004 by Elaine Yetzer Simon

Conditions are looking brighter for the hotel industry in Miami. Even with an increase of the number of hotel rooms in the city, the forecast for 2004 is encouraging.

"What we have seen across the destination is an improvement when comparing the rest of the country, as well as within the state of Florida, in both occupancy and rate," said Jorge Gonzalez, general manager of the 329-room Mandarin Oriental Miami. "It's not something that is amazing, but it's definitely in an upward direction."

Ignacio Gomez, general manager of the 260-room Four Seasons Hotel Miami, also is anticipating a better 2004.

"If we look at the business systemwide, there's no question that we're looking at a much stronger 2004," Gomez said. "It might not be the level of 2000, but it certainly will be an improvement over 2003. At this particular hotel, it's quite encouraging."

The Four Seasons, which also has an 84-unit condominium hotel, opened in October.

"The predictions of really slow business have improved quite a bit," Gomez said. "I have been pleasantly surprised at how much it has picked up. We're looking at a first quarter that is very encouraging. Weekend business is so much better than I expected."

John Stowell, director of sales at the 417-room Crowne Plaza Royal Palm on South Beach, said the summer and fall of 2003 were better than expected, and 2004 looks to follow that trend.

"The hotel has only been open since May of 2001, so both the first and second quarter look better than last year, especially the second quarter," Stowell said. "Our summer was much better than we expected. The stableness is much better than the ups and downs and uncertainty."

Stowell said increasing occupancy at the hotel has been an encouraging sign.

"Occupancy has increased [since 2002]," he said. "We're probably going to be at about 60 percent to 65 percent. The second half of [2004] we're hoping to be strong. We're hoping the strong performance from the summer will continue."

The Mandarin also has experienced increasing rate, as well as occupancy.

"Our rate has grown probably about 15 percent better than we expected to end [2003] at, and occupancy grew about 10 percent," Gonzalez said.

He said management is hoping for another 15-percent increase during 2004 over 2003.

"We say that cautiously, as long as things continue the way they have been," he said. "The markets need to continue to perform in the same fashion. 2004 is not going to be a star year, but it definitely will be a lot better than [2003]."

Gomez said that even with the ups and downs of the past several years, the hotel has maintained its rates.

"We don't drop rates," he said. "That's not something we do. We've found throughout the past 20 years that dropping rates does not generate any demand."

Stowell said the Crowne Plaza will counter lower occupancies by offering specials.

"We definitely have deals out there for time periods when we're slow," he said. "The first quarter is naturally a very busy time for Miami, so we're not offering a whole lot of deals right now. For the most part, it's a hot destination people look forward to coming to."

Gonzalez said Mandarin also offers packages, which sell well.

"We sell two- and three-night packages and spa packages," he said. "We have seen that our spa has started to develop roomnight business. It's not just an amenity, but a destination."

The food-and-beverage operation at the Four Seasons has been extraordinarily successful, which also has helped business, according to Gomez. The hotel recently opened an outdoor bar that attracts hundreds of people on the weekend, he said.

Good for business

The Miami area has a good mix of business and leisure travelers, according to the hoteliers.

"Miami has really developed itself into not only a leisure destination but a corporate business destination," Gonzalez said. "It's a very central location for leisure as a gateway and also for international corporate business. A lot of people do international meetings here because it's easy to get in and out."

Gonzalez said part of the attraction is that it's affordable to conduct business in Miami.

"We're making some inroads in Latin America," Gomez said. "The Latin American market is expected to be 30 percent to 40 percent of occupancy. The Europe market will be important for us as well. Our brand has gained such strength in Europe that it becomes easier to market there."

Stowell said the Crowne Plaza, as well as the Miami area, are looking for new ways to attract business in the off-season--June through September.

"We're trying as a hotel to become a more family-oriented place during that time," he said. "We're not just a wintertime place. It's a great place to come in the summer as well, with shopping, beaches, outstanding restaurants and museums."

esimon@advanstar.com