United States -  Miami - Hialeah

Overview:

Miami boasts an increasingly diversified economy and has emerged as a center for international tourism, banking, foreign trade, entertainment, technology, and distribution. Miami serves as the headquarters of Latin American operations for many multinational corporations, and the Miami International Airport and the Port of Miami are among the nation's busiest ports of entry, especially for cargo from South America and the Caribbean.
 
In 2015, the Miami market experienced its third-straight year of record occupancy and average-rate performance despite a robust supply increase. Additionally, RevPAR increased year-over-year from 2010 through 2015. Supply additions in Miami have been significant. New hotel rooms in 2015 totaled nearly 3,000, with more than 2,000 rooms expected to come online in 2016. Occupancy levels remained relatively flat in 2015 as supply and demand growth were generally even. The influx of high-quality hotel rooms and strong demand levels resulted in significant average rate and RevPAR growth in 2015. Nonetheless, decreased international tourism from South America and new supply are expected to hinder both occupancy and rate growth in the near term. The luxury segment is anticipated to be affected the most by new supply. However, the balance of domestic and international tourism, as well as region’s diverse economy, should provide relative stability as the hotel market in Miami begins to normalize.
 
Thirty-five hotels totaling $2.4 billion in transaction volume have sold since January 2015, including the Ritz-Carlton Key Biscayne Miami, which sold for $492,875,000 ($1,632,000 per key) in May 2015. Seven other hotels, all of which were located in Miami Beach, sold in this market for over $500,000 per key between January 2015 and April 2016. Overall recorded sales during that period averaged just under $350,000 per room. We expect the value of Miami hotels to decline from 2016 through 2018, in line with an anticipated decline in RevPAR, higher capitalization rates, and the expected shift in the capital markets. Stronger values in 2019 should be supported by a lack of new supply coupled with higher occupancy and average rate levels.
 
* 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:

Miami - Hialeah United States
Previous Year -3% (64 of 71) +1% (49 of 71)
Growth in 2017 -5% (68 of 71) +2% (36 of 71)
Growth in next 4 years -4% (64 of 71) +12% (32 of 71)

Change In Value For Market:

Miami - Hialeah 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)