Experts Fear Two New Towers Will Oversaturate Downtown Miami Hotel Market
Written by Leslie Kraft on August 14, 2003
By Leslie Kraft
Hotel operators are cheering July’s higher occupancy rates, but industry experts say two luxury properties – set to open only blocks apart and add 424 rooms near downtown Miami – will struggle.
The Four Seasons, with 221 rooms and 84 hotel-condos, plans an October opening, and Conrad Miami, with 203 rooms and 100 hotel-condos, is to open in January. Both are on Brickell Avenue.
"The number of luxury hotels has increased significantly in Miami since 2001," said Bruce Ford of hotel-research firm Lodging Econometrics. "They compete for a similar guest and may take some business away from South Beach."
Chase Burritt of research firm Burritt Associates agrees.
"They will struggle with intense pressure on room rates in a poor economic environment and against the backdrop of war and terrorism," he said. "The tough times are very difficult for South Florida because of cutbacks in domestic and international travel."
While local officials say having fewer visitors in the past two years has made it difficult to fill rooms, they are optimistic. Miami-Dade County hotels in July enjoyed higher occupancy growth than Florida and national averages, according to Smith Travel.
Miami increased room occupancies 19.3% in July from July 2002 to 69.7% compared to the Florida rate of 68.1% and a national average 72.7%.
The Four Seasons and Conrad hotels are in mixed-use projects that will help them ride out tough times, Mr. Burritt said. Four Seasons is selling residences and offers office and retail. Espirito Santo Plaza, home of Conrad Miami, will also have office space and retail.
"They are hoping the blended investment," he said, "will spread some of the risk across different uses."