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The success of Miami hotels, a barrier for international groups

Written by Mónica Correa on June 21, 2022
  • miamitodayepaper.com

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The success of Miami hotels, a barrier for international groups

International group travel to Miami is challenged by high room rates brought on by the area’s success as a leisure destination.

High hotel block prices in the group travel business and long visa processing delays are slowing sales growth for international groups, says David Whitaker, president and CEO of the United States Convention and Visitors Bureau. Great Miami.

In May, the average daily rate for Miami-Dade hotels was $270.62, up 15.7% from May 2021. Surfside and Bal Harbor are the highest at $817.82, up 21.8% more than last year.

Revenue per available room in Miami Dade is around $195.59, 12.7% more than last year. Surfside, Bal Harbor and Miami Beach also top the list as of May, according to STR.

“One of our challenges is our own success,” said the office’s director of operations, Rolando Aedo. “Because of our success as a destination, our hotels can generally charge very high room rates, so group business travel meeting planners look to contract for several hundred, and sometimes several thousand, rooms on behalf of the hotel. group or the association, and it is very difficult for them to give rooms cheaply, so it is a kind of paradox”.

From January to March, Miami International Airport had nearly 1.7 million international arrivals and about 3.6 million domestic arrivals. International travel is up 113% compared to last year, but is still 15% behind 2019.
As of June 15, 40.7% of arrivals at MIA were international. April 2 and 3 had the highest percentage of international arrivals since the first week of the year, with 47.4% and 47.2%.
“International travel, in general, due to the pandemic, has been the area of ​​our overall visitor industry that has taken the longest to recover,” Aedo said. “When you look at our domestic leisure travel, they’ve gotten really strong, but group travel took longer and is just getting started now.”
Miami-Dade hotels, especially in Miami Beach, have relied on leisure businesses to stay afloat during the pandemic, he explained. Demand grew due to closures in other areas of the US, allowing Miami-area hotels to raise prices. “And while that’s great for the county because those high room rates drive sales taxes and tourist taxes, which support a lot of our public projects, it makes it significantly more challenging when it comes to putting together blocks of hotel rooms. at certain low prices for conventions. that may come several years from now.”

Hotels, he said, face the challenge of whether to make the long-term commitment to discount a number of rooms or keep those rooms and sell them for more when the traveling business group arrives.

“Our success right now as a destination, and since the pandemic, has been driven primarily by the domestic leisure business,” Aedo said, but he sees the international market accelerating after the Biden administration lifted the requirements on June 12. for international travelers to test negative for Covid-19 before boarding a flight to the US.

“We hope that by the end of this year, we will see a return to the historical balance of international and domestic travelers to Miami,” he said; “which has typically been about 50% each.”

“Our challenge now is to maintain the largest market share we can get from domestic travelers and regain international market share as other countries open up,” Mr. Aedo said. “Looking at our latest hotel numbers, hotel gross receipts in Greater Miami are up 162% compared to last year, which is dramatic. And that has been driven by the home entertainment business.”

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