The Miami hotel market comprises eleven distinct submarkets located throughout Miami-Dade County. As of February 28, 2019, the market offered 58,025 hotel rooms. A strong and diverse mix of room-night demand generators in the commercial, leisure, and meeting/group sectors provide the underlying strength of the Miami-Dade County hotel industry. In 2018, the greater market experienced a 2.5% increase in demand, which offset a 2.0% increase in supply. Market-wide average rate (ADR) in 2018 increased by 2.4%, with year-end ADR coming in just shy of $200. Market-wide occupancy registered 76.7% in 2018, just slightly above the average annual occupancy of 76.5% achieved in 2017. In 2018, Miami ranked the fourth best-performing hotel market in the nation, climbing from the fifth spot in 2017 and taking over Boston's spot. The greater Miami market had the second-highest increase in RevPAR in a comparison to 2017, only behind Minneapolis, whose performance benefited from the Super Bowl. Results for the first quarter of 2019, however, show some softening of the Miami hotel market, with weaker metrics when compared to the same period in 2018. RevPAR decreased by 3.5% in the first quarter of 2019, which will likely have a negative influence on the overall annual performance this year; nevertheless, it should be noted that the submarkets of Coconut Grove and Miami Beach registered RevPAR gains, largely driven by ADR growth.
Combined, the top five submarkets of the greater Miami market registered an average occupancy of 80% from 2013 through 2018. The Airport/Civic Center submarket registered the highest average occupancy at 86%. The five-year average occupancy for Greater Downtown was 76.5%, a slightly higher occupancy than the 75.3% registered for Miami Beach. Almost all of the top five submarkets realized a decrease in occupancy over the last five years. Aventura/Sunny Isles observed the largest drop in occupancy, with a 17.3% decrease. Doral was the only submarket to experience positive growth in occupancy, with a 4.8% increase. The highest occupancy submarket, Airport/Civic Center, registered a 0.6% decline in occupancy. Greater Downtown had a 0.8% decrease over the last five years. Over this same period, there was a 27% increase in room supply, indicating that the development that is occurring is actually meeting demand rather than oversupplying the market.
Improvements to Miami's infrastructure at both Miami International Airport (MIA) and PortMiami have had a positive impact on visitation which, in turn, has created the demand/need for additional hotels. Between 2009 and 2018, passenger traffic at MIA increased at an annual rate of 3.2%, although it recently slowed to an annual growth of 2.1% between 2013 and 2018. PortMiami has experienced a similar long-term growth of 3.4% between 2009 and 2018; however, unlike MIA, exhibited very strong growth of 6.5% over the last five years. Since 2009, Miami's hotel supply has increased at an annual rate of 2.3%, which falls below the passenger growth that has been driven by the airport and the port. Further improvements to infrastructure that have been recently completed, such as the expansion to the Miami Beach Convention Center, or are planned, such as Virgin Trains express inter-city rail system and MDM's Marriott Marquis Miami Worldcenter, bode well for the development of additional hotels and resorts.
There were fifteen transactions of individual hotels (non-portfolio) in Miami-Dade County in 2018; total sales volume was $218 million (1,377 hotel rooms), for an average per-key price of $158,315. It was the first time in the last ten calendar years that the sales volume of limited-service hotels surpassed that of full-service hotels. The average price derived from the eleven limited-service hotel sales was $130,296 per room, and the average price from the four full-service hotel sales was $219,399 per room.
* 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
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