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Miami-Dade County's March, 2009 Hotel Tax Receipts Down 22.2%
 from Prior Year; Has the Bottom Been Reached?

By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

May 6, 2009--Miami-Dade County's hotel industry might have stopped the financial bleeding this spring, posting a slightly narrower decline in tax collections in March than it did in February.

The new numbers don't yet show recovery -- taxes charged hotel guests were down 22.2 percent, making it the worst March decline on record since Miami-Dade began collecting hotel taxes in 1983.

But the drop was a tiny bit better than February's 23.6 percent decline, offering hope that the sharpest tourism retreat since the 2001 terrorist attacks won't get worse.

"Somewhere in the middle or end of March, we started seeing some numbers come back," said Jean Francois Mourier, CEO of Revpar Guru, a Miami Beach company that sets room rates for about 20 South Florida hotels. "April is down about 10 percent. It's bad, but it's not horrible."

With consumer confidence on the rise, the housing market picking up steam and stock prices improving, the travel industry has been hoping for a rebound, too.

Some air carriers this week reported recovery in April. American Airlines said traffic was down 4.7 percent in April, compared to March's 10.9 percent drop.

Broward County has not released its March hotel tax report.

The shifting dates of the Easter holiday can influence spring vacation plans, making hotel reports notoriously volatile in March and April. But summer remains the biggest question mark hanging over South Florida's tourism industry.

Last year saw a surge of Europeans taking advantage of a weak dollar to book discounted South Florida vacations. The influx of foreign visitors compensated for a decline in domestic tourists -- a slide that accelerated rapidly after the autumn financial collapse.

Now, hoteliers are bracing for a summer expected to be even tougher on the domestic front and likely challenging with international tourists, too.

KEY TEST

A key test will come later this month when the largest gathering of foreign travel wholesalers comes to Miami Beach. Known as Pow Wow, the yearly show allows tour operators abroad to reserve U.S. trips for the following year.

The Miami Beach meeting will offer a good barometer on the foreign travel market.

"I'm more interested in what the tour operators are going to say on the floor 11 days from now," said Stuart Blumberg, president of the Greater Miami and the Beaches Hotel Association. "Will the international market come back to the States? That's a key element."

Blumberg declined to predict when the hotel market's decline would stop, saying "all the negative factors haven't played out for us yet."

The meetings industry, ravaged by cutbacks in business spending and spooked by crackdowns on corporate excess, remains in retreat. And hotels continued to offer deep discounts on rooms through March. A Smith Travel Research report showed South Florida's room rates down about 18 percent for the month.

Even the top hotels aren't immune to the troubles.

The Delano, arguably South Beach's most popular hotel, saw revenue per room plunge 34 percent during the first three months of the year largely due to a 24 percent drop in occupancy, according to parent company Morgans Hotel Group.

The average nightly rate at the Delano dropped from $683 last year to $599 this year.

As travelers insist on bargains, the lower room rates are cutting into tax collections.

Hotel taxes are scheduled to fund roughly 90 percent of the $442 million Miami-Dade County expects to borrow to build a new Florida Marlins baseball stadium in Miami.

TAX COLLECTIONS

The March decline puts total hotel tax collections down 14 percent for the budget year that began in October. A stadium financing plan released by County Manager George Burgess contemplates as much as a 20 percent decline in 2009.

That scenario depends on an equally dramatic comeback, with hotel taxes gaining between 9 percent and 10 percent a year from 2011 through 2013.

The projection touches on the next big question to face the hotel industry once it hits bottom: how long before they can get rates back to where they were?

After the 2001 attacks, it was 2004 before the average Miami-Dade hotel could charge more for a room in March than it did in March 2001. Andreas Ioannou, general manager of the Fort Lauderdale Hilton, predicts a more drawn-out recovery this time.

"On 9/11, the economy was in sound shape after the events happened," he said, noting that companies began booking meetings fairly quickly after the attacks. "That was a confidence issue. [This time] there was a world economic collapse."

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Copyright (c) 2009, The Miami Herald

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