Miamidade Hotel Industry Suffers Another Dip Experts Blame New Scrutiny On Business Travel
Written by Frank Norton on August 8, 2002
By Frank Norton
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Hotel occupancy in Miami-Dade plunged 8.6% in June compared to June 2001 as corporate America further slashed business travel, local experts said.
According to Tennessee-based Smith Travel Research, Miami-Dade’s June rate of 56.5% is the county’s lowest this year.
"On top of the general contraction in corporate spending, companies are now leaning toward smaller meetings and even teleconferencing as a substitute to large-scale travel," said Anwar Elgonemy of Jones Lang LaSalle Hotels.
He and others attributed the rash of accounting scandals plaguing corporations for companies’ higher anxiety over business spending.
Although June historically marks the worst of Greater Miami’s summer lull, this year’s dip is worsened by room rates already slashed to prop up occupancy. That has hurt the bottom line, experts say.
Average room rates dipped to about $87 in June, the lowest since September 2001.
But the need to extend deals to corporate America remains, hoteliers say.
"Business is much softer this summer than in previous years because a lot of group travel has simply not come in," said Debbie Castillo, Loews Miami Beach director of sales & marketing. "Companies are watching their dollars and staying much closer to budget due to lower earnings and, now, accountability issues."
"People are lying low and are very cautious about spending, accountability and justifying travel to the CEO," Mr. Elgonemy said.
He said economic contagion from Argentina has significantly reduced travel from South America, while Mexico’s sluggish economy has further cut demand.
The Department of Commerce sees visitation to the US from Argentina, an historically important summer travel market for South Florida, falling 21% in 2002 compared to last year’s levels.
But Jesse Stewart, general manager of South Beach’s Royal Palm Crowne Plaza Resort, offers a more temporary explanation for the gloomy visitors’ industry.
"One reason for the June decline could just have the terribly bad weather," he said. "It rained so much in June that it deterred travel. People were looking for sun.
Mr. Stewart said he thinks occupancy levels will show an increase for July and August as the drier, sunnier weather revives the summer driving-visitor market.
"I think things already picked up in July with the great weekends."
And, despite June’s dreary figures, Miami-Dade hotels did top the US room-occupancy average by a margin of 10% for the first half of the year after sustaining a significant year-over-year drop to 65.8%. The local six-month statistic compares to a national average for hotel occupancy that eased to just under 60%.
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