Skeptics Wonder If South Beach Is Good Fit For Ritz

By Shannon Pettypiece
South Beach will get a little ritzier next month with a new Ritz Carlton hotel luring high-end clientele to a traditionally younger area.

Observers say the five-star hotel will face many challenges entering a market still recovering from 9/11 and unaccustomed to the luxury-hotel crowd.

The 1950s DiLido hotel was renovated into the South Beach Ritz at a cost of $200 million and will open Dec. 18 along with an elevated pool, 13,000-square-foot spa and more than 30,000 square feet of meeting space.

The South Beach Ritz will join five other Ritz Carltons in South Florida – in Coconut Grove, Key Biscayne, Palm Beach and Naples, which has two. There are 35 Ritz Carltons in 15 states.

The Ritz expects to attract a sophisticated and affluent crowd.

"There has been a dearth of luxury five-star hotels on South Beach, and I think that differentiates it from other hotels in the market," said Michelle Payer, a spokeswoman for Ritz Carlton. "The traditional Ritz Carlton guest may not have visited South Beach before because they didn’t have the five-star accommodations."

Rates for the hotel’s 375 rooms range from $300 to $1,500 a night, and Ms. Payer said it is booked through early January.

Others in the industry say the Ritz will face a challenge drawing the type of guests the chain needs to feel comfortable on South Beach.

"The real challenge for them will be to see if their guests like what they see on South Beach," said David Kelsey, president of the South Beach Hotel & Restaurant Association, consisting of about 150 hotel, restaurant and nightclub owners.

South Beach is "geared to a younger, less-demanding guest. Our strength is with our nightlife and restaurants, and our roots are with the fashion industry," he said. "The Ritz, to be successful, is going to need to bring in its own established clientele that stays at its other properties all over the world."

The hotel is taking measures to target a younger, hip South Beach crowd by bringing in a disc jockey three nights a week and booking other entertainment for the hotel’s two bars.

"If South Beach was a nightclub, this hotel would be the VIP room, and I think the younger, affluent crowd understands that," Ms. Payer said. "South Beach is not a homogenous, cookie-cutter area. You have so many elements that make that area exciting."

The new hotel is at Collins Avenue and Lincoln Road. There are several three- and four-star hotels on Collins, but some say Ritz Carlton guests are not used to having a Burger King restaurant across the street and T-shirt shops next door.

In an effort to spruce up the area, Ritz Carlton has revamped Lincoln Road between Collins and the ocean by adding palm trees, street stones and a fountain, Ms. Payer said.

Miami Beach officials said they plan several projects to spruce up the area. Miami Beach spokeswoman Nannette Rodriguez said the city plans to add a paved beach walkway behind the hotel, improve lighting and landscape nearby roads. She also said the city has long-term plans to clean up Washington Avenue, which is two blocks from the hotel.

The Ritz, which was under construction before 9/11, also faces a continuing tourism slump although there are signs of a rebound.

"Things are beginning to turn a little bit," said Bruce Ford of hotel-research firm Lodging Econometrics. "But has international travel come back? ‘No.’ It has a way to go. We have bottomed out, and we are going to see better times."

Mr. Ford said the industry has seen five straight months of increased business and hotel operators are learning to adapt to the tough climate.

"We really have become a much healthier industry and a much leaner industry. There are more profits available in hotels because we run them smarter," Mr. Ford said. "Demand is quickening in about every market in the country, so there is a little bit of demand to capture."

Also new to the county are the Four Seasons Hotel and Tower and the Conrad Hotel, both on Brickell Avenue. Fifty more hotels have opened in the area in the past three years.

Mr. Ford said the two luxury Brickell hotels will cater to the business crowd, while the Ritz will be in a class of its own on South Beach.