Jul. 6--The accountants liked what they saw. So did the general manager, the regional director, and everyone else in the executive food chain. 

The Ritz-Carlton Key Biscayne, a $140 million resort that opened 72 days before the World Trade Center collapsed, beat its revenue expectations this year by 12 percent. 

"The Key Biscayne story is a very exciting one for us," said Ezzat Koury, regional director for Ritz-Carlton in Southeastern United States, Mexico and the Caribbean. "By first-year standards, it's one of the best-performing Ritz-Carltons." 

As the overall lodging industry still reels from the economic downturn and terrorist attacks, Ritz-Carlton Key Biscayne is doing quite well, leveraging its location and brand recognition into an attractive destination for well-to-do Americans who are reluctant to vacation overseas. 

The success is even more noteworthy for the luxury resort market, where average revenues, according to industry tracker Smith Travel Research, are down nearly 9 percent so far this year. 

The projections were made well before Sept. 11, the day most hotels began lowering revenue forecasts because of the travel industry's grim climate. 

Luxury properties like the Breakers in Palm Beach and the Boca Raton Resort & Club reported better-than-expected fiscal years, considering Sept. 11, and both managed to hang on to room rates above $420. 

Still, both rely heavily on repeat guests to feed their bottom line, something the Ritz-Carlton Key Biscayne did not have. 

"We're got very loyal repeat clientele that come down every year," said David Burke, the Breakers' vice president of sales and marketing. "I'd hate to say they're recession-proof, so rich that it doesn't matter, but they keep coming back." 

Miami's Mandarin Oriental, a rival to the Ritz, had a wobblier first year than the Ritz. Located in Brickell Key, close to downtown Miami's business hub, the Mandarin is still smarting from corporate travel cutbacks but reports a strong recovery. 

It has yet to establish the devout following that goes with the Ritz-Carlton name. 

"The Ritz brand is one of the best in the business," said Chase Burritt, an analyst with Ernst & Young. "Around the world it's maintained a great presence, and that's very, very hard to do." 

Hotels take between one year and never to break even, depending on revenue and debt structure, and Koury said Ritz-Carlton hotels on average become profitable in two or three years. Marriott International, Ritz-Carlton's parent, does not disclose profitability of its divisions. But overall Marriott profits fell 50 percent in the most recent fiscal year. 

Company executives and industry analysts say the Ritz-Carlton Key Biscayne's prowess boils down to an enviable mix of brand loyalty, consumer curiosity, and, the main determinant of any hotel's success: location. With 450 rooms and ample meeting space, the hotel is also finely tuned to business travelers. 

"We're the first luxury resort in Miami," sad Michael Carsch, the hotel's general manager. "Where else can you go from a major international airport to a luxury resort on the beach in 25 minutes?" 

The hotel opened July 1, 2001, in a year when a sluggish economy was hammering away at the hospitality industry's growth. Nestled in Key Biscayne and designed in the tradition of Old Florida grandeur, the hotel was warmly greeted by locals, along with the 600 jobs it created. 

When Sept. 11 hit, the hotel braced itself for a painful winter, and October saw occupancy levels hover around 40 percent. 

But business returned faster than expected. Many companies made good on their meeting bookings, eager to sample the latest Ritz-Carlton wares. Silver-spoon tourists, skittish about island hopping, opted to try out the newest Ritz on the block that, an added bonus, was practically in the Caribbean. Well-heeled South Floridians, itching to get away but gripped by flight fright, hopped in their cars and drove to Key Biscayne instead. 

The Key Biscayne occupancy levels are ahead too, trouncing occupancy at the company's Caribbean and Mexico properties, which were devastated by plummeting international travel, and outpacing Ritz-Carltons in Naples and Palm Beach. 

"A lot of people are coming here from Naples, Palm Beach, anything that's within a two- or three-hour drive," Carsch said. "People not necessarily worried about flying but about getting stranded found we were a very good alternative." 

Another boon came from greater-than-expected catering revenue, gleaned from American Red Cross and Florida Philharmonic Society galas and high-profile weddings. 

"We seem to be in a good place in the social market," Carsch said. "We turn a lot of functions down because we can't commit the space." 

But industry watchers caution that the Ritz's success is not necessarily an indication of what other luxury properties soon to open in Florida can expect. 

Some $1 billion worth of luxury hotels are coming on line, among them downtown Miami's Four Seasons and a Ritz-Carlton South Beach, expected next year. 

"It's an aberration, one of the few high-end resort hotels with meeting capability that's actually on the water," said Scott Brush, an independent hospitality analyst. "You've got a market where there wasn't a whole lot of high-end, and you became the first one on the beachfront. But there's no telling what is going to happen out there next." 

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(c) 2002, The Miami Herald. Distributed by Knight Ridder/Tribune Business News. MAR,