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Foreign Travelers Continue to Boost South Florida's
 Tourism Industry, But for How Long?

By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

September 25, 2008 - The economy continues to hurt South Florida's tourism industry as more travelers opt to stay home.

Occupancy levels dropped 5 percent in Broward County last month even as hotels cut rates, new numbers from Smith Travel Research show. The Florida Keys saw a similar decline.

Only Miami-Dade, a popular summer vacation spot for Europeans, saw gains, with occupancy and room rates better than a year ago.

"The economy has caught up with the tourism industry," said Nicki Grossman, president of the Greater Fort Lauderdale Convention and Visitors Bureau. "That does not speak well for our industry as we move forward."

The pessimistic tone from one of the biggest cheerleaders for Broward's lodging industry reflects the turning point under way across South Florida's tourism landscape. After nearly five years of booming hotel construction and hefty rate increases, many positive trends have flattened or turned negative.

This summer, Miami-Dade recorded its first midyear decline in domestic tourism, although the 1 percent loss was erased by an 8 percent surge in foreign visitors taking advantage of a weak dollar.

Average daily room rates are down less than a point in Broward, but the flat performance contrasts with last year's 9 percent gain and the 17 percent gain recorded in 2006. In the Keys, room rates are down 5 percent this year, a reversal of a 9 percent gain in 2007 and a 12 percent increase in 2006. While not yet dramatic, the downward trend is unwelcome news for South Florida.

"It's certainly the most difficult time since the post-9/11 era," said Scott Berman, a hospitality analyst in Miami for PricewaterhouseCoopers. "And it happened quickly. It's potentially going to continue to erode."

Even so, hotel taxes continue to grow: up 4 percent for the year in Broward, 3 percent in the Keys and 5 percent in Miami-Dade. And the latest state employment report showed 3,200 new jobs in South Florida's leisure and hospitality sector.

But with high gas prices making vacations more expensive and declining corporate profits cutting into business travel, hotels see hazards all around them. The recent meltdown on Wall Street has added to the stress.

"I think it scares everybody," said Eric Jellson, area sales director for the Epic Hotel in downtown Miami opening in December. "It makes us all a little bit nervous about where it's going to go."

With nearly 50 percent of its tourists coming from abroad, Miami-Dade hopes to weather the U.S. economic turmoil better than other tourist destinations. "I think international [travel] will continue to be strong," said William Talbert III, president of the Greater Miami Convention and Visitors Bureau.

But with analysts warning of a coming European recession, future foreign tourism may not offer South Florida relief. In Broward, Grossman said her staff is considering boosting marketing dollars abroad, with a focus on the European market.

"We still think there's a good year or two left in the U.K. and Europe before their economy goes bad," she said.


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