United States -  Fort Lauderdale

Overview:

Fort Lauderdale's economy encompasses industries and sectors such as finance, health care, manufacturing, marine, aviation, technology, life sciences, and tourism. The tourism industry in particular continues to thrive as an anchor for the region's economy, with an estimated 15 million visitors in 2015, providing an economic impact of nearly $12 billion. According to The Greater Fort Lauderdale Convention and Visitors Bureau, 2014 represented a record-breaking year for the tourism industry with more than 14 million visitors spending $11.4 billion at local hotels, attractions, retail shops, and restaurants. The significant growth in tourism to Fort Lauderdale has led to increased activity within the cruise industry at Port Everglades and stronger passenger traffic at the Fort Lauderdale-Hollywood International Airport. Although the number of cruise ship passengers that sailed through Port Everglades decreased during fiscal 2014/15, passenger counts significantly increased, reaching a historical peak. According to Port Everglades, cruise passengers in 2015/16 are expected to eclipse 4,000,000 for the first time. Given these trends, the local government has made substantial investments to improve and expand the Fort Lauderdale-Hollywood International Airport and Port Everglades.

The market area is highly seasonal in nature, with occupancy levels typically exceeding 85% during the months of November through April. The market attracts a significant amount of leisure demand from the Northeast; as such, the traditionally colder months tend to represent high-season for the Fort Lauderdale area. Leisure demand drops from May through October, when South Florida's weather is quite hot and humid, with a higher chance of hurricane activity. Average rate levels follow similar trends to those of occupancy.

Eleven hotels totaling approximately $980 million in transaction volume have sold since January 2015, including such significant assets as the Ritz-Carlton Fort Lauderdale (highest total price paid at $86,376,000 or $520,337 per key) and the Martindale at the Beach (highest price per key at $672,000, for a total of $12,100,000). In recent years, improving market conditions have put downward pressure on capitalization rates, driving hotel values to peak levels. However, early indications for 2016 illustrate a deceleration of growth in transaction volume, and values are anticipated to stabilize in the near term. As the transaction market for hotels declines over the next several years given the introduction of new hotel supply coupled with the expectation of higher interest rates, capitalization rates are likely to increase; as such, hotel values are forecast to fall slightly in future years.

* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

 

Valuation Trends and Predictions:

Fort Lauderdale United States
Previous Year +1% (45 of 71) +1% (49 of 71)
Growth in 2017 +1% (41 of 71) +2% (36 of 71)
Growth in next 4 years +11% (39 of 71) +12% (32 of 71)

Change In Value For Market:

Fort Lauderdale RevPar % Change

For more information, please contact:

Kathy Conroy, MAI
kconroy@hvs.com
  • +1 305 378-0404 (w)
John Lancet, MAI
jlancet@hvs.com
  • +1 305 378-0404 (w)
  • +1 305 502-1167 (m)