Medical and architectural conventions offer big boost to hotels
By Scott E. Pacheco
Cancellations have nearly slowed to a halt, but it may take a couple of years before Greater Miami's convention business reaches pre-recession levels, an industry official says.
While rooms are starting to fill up, competition and the economy have driven room rates way down. But at least for now, it appears the AIG effect — companies not wanting to splurge in resort areas during recessionary times — is waning, said Ita Moriarty, senior vice president of convention sales at the Greater Miami Convention & Visitors Bureau.
"What the hotels are seeing now is a stabilization of that… no more cancellations. That's done, hopefully finished," she said. "There's been a little bit of bump up, a little bit of an uptick. Most of that is smaller [groups] as corporations start to bump up their budgets."
Next year, Miami will get a boost from the National Football League's Pro and Super bowls, which are expected to account for 56,000 room nights at the end of January and beginning of February.
Also on the docket are conferences for the American Academy of Dermatology in March and the American Institute of Architects in June, which are to bring in 28,330 and 29,475 room nights, respectively.
All said, about 152,000 room nights are scheduled for 2010, according to the convention & visitors bureau, though much of that was booked years in advance, Ms. Moriarty said.
"It's a process — for the larger groups we have a great fiscal year coming up," she said. "If you book things in '04, '03 and '02, all of this will help in kind of filling some of the gaps in spite of the economic trends."
John Visconti, director of sales and marketing with the Hyatt Regency Miami, said his sales pace is off this year as the Hyatt, like most hotels, was hit by cancellations
"It's starting to come back a little bit — I haven't seen a spike," he said. "We are still a little ways off before there's more euphoria. Eventually over the next few months I'll see commercial activity pick up again. We are starting to see travel coming back slowly — it'll take through the end of the year for us to see any type of sizeable increase."
Occupancy at the hotel is projected to be up this year, he said, but that doesn't mean a lot for the bottom line. The Hyatt is one of downtown's biggest venues, offering 100,000 square feet of business space with access to the neighboring Knight Center facilities.
"This year our occupancy will be 1% greater than it was last year, but the rate dropped significantly," he said, adding that maintaining occupancy in hard times will pay off.
"We've been to that dance before," he said. "If your hotel is maintaining occupancy, when the rate returns you will sling-shot forward. Now you can replace them with higher rates. What I found in the market coming out of recessions — the rate will come back quickly."
One trend that hasn't relented has been the tendency to book closer to the event date as groups weigh their options and their wallets.
"That's still going on, a nature of the competitive set," said Ms. Moriarty of the visitors bureau. "If you are a meeting planner, regardless of [who you are] you've got more product to look at. They are wheeling and dealing a lot more — pitting cities and hotels against each other."
At the Miami Marriott Biscayne Bay, the group business that is picking up is exactly those booking only 20 to 30 days in advance, said Alexandra Welch, director of sales and marketing.
"We have seen a little bit of an uptick, especially for the fourth quarter," she said, adding that the business is smaller groups for three or four days and is coming mainly from big pharmaceutical companies and some corporate business.
Looking ahead, both Hyatt's Mr. Visconti and Kimberly Wilson, area general manager with the Miami Marriott Biscayne Bay, said sales pace for coming years is accelerating.
"Sales pace is picking up for next year," Ms. Wilson said. "It's still year-over-year a negative percentage, but it's getting much closer."
Mr. Visconti said after suffering a down year this year, sales pace is positive for the next several years.
"I don't want to be overly optimistic,' he said. "The fact that it's just positive — that indicates a lot to me."