|By Elaine Walker, The Miami
HeraldMcClatchy-Tribune Regional News
Dec. 20, 2011--Miami Beach hotels have a good thing going compared to Las Vegas.
An analysis conducted for the city of Miami Beach by Strategic Advisory Group shows Miami Beach's top hotels ring up dramatically higher rates -- often twice as much -- as similar properties in Las Vegas.
The figures underscore concerns by hoteliers in Miami Beach and elsewhere in Miami-Dade County, who fear that the arrival of two proposed destination resort casinos could drive down room rates. That worry is driven in large part by the size of Genting's Resorts World Miami, the $3.8 million project with plans for 5,200 rooms on The Miami Herald site.
That amounts to a 25 percent increase in Miami-Dade's current upscale hotel market, which includes 20,313 luxury and deluxe hotel rooms. The largest hotel now in this category is the Fontainebleau Miami Beach, with 1,504 rooms.Based on past history, it would take 19 years for the county to absorb an additional 5,000 rooms , Strategic Advisory Group found.
"If you put 5,000 hotel rooms in Downtown they will suck out everything surrounding them," said Stuart Blumberg, the retired head of the Greater Miami and the Beaches Hotel Association. "It will take 19 years for the current hotels to break even. They're going to destroy the market inventory."
Max Sklar, director of tourism and cultural development for Miami Beach, referred calls for comment on the analysis to the Miami Beach City Manager Jorge Gonzalez, who did not respond to multiple messages. Strategic Advisory Group declined to comment on the report. A spokesman for the Greater Miami Convention and Visitors Bureau said it had had not received any information from the city.
If Miami-Dade County were to see two projects of this magnitude come online simultaneously that would be the equivalent of 34 years of historical supply growth. In the short term, that could mean a supply of room nights about twice the level of demand, based on the analysis, which used rate information from Smith Travel Research.
Some of Strategic Advisory Group's findings:
-- Miami Beach hotels in 2010 rang up an average daily room rate of $189 with an occupancy rate of 68 percent. That number jumps to $243 if you only include the city's six convention hotel: Fontainebleau, Loews Miami Beach, Renaissance Eden Roc, Royal Palm Hotel, Shore Club Hotel and The Palms Hotel & Spa.
By contrast, the hotels on the Las Vegas Strip in 2010 posted an average daily room rate of $112 with an occupancy rate of 89 percent. That number drops to $48 for the hotels in Downtown Las Vegas.
-- Surveys of published hotel room rates for January through June 2012 found that the Wynn was the only Las Vegas hotel of the six surveyed that had an average rate comparable to those of nine hotels surveyed on Miami Beach. The survey looked at the Hilton, Luxor, MGM, Caesars, Venetian and Wynn in Las Vegas. The Miami Beach survey looked at the Palms, National, Marriott, Eden Roc, Loews, Fontainebleau, Ritz, Delano and W.
-- Miami Beach's average published room rate during January through June was $448 on Tuesday and Wednesday nights -- nearly double the average that Las Vegas Hotels ring up on Fridays and Saturdays.
-- Miami Beach published rates on Friday and Saturday nights for January through June 2012 range from an average of $367 at the Palms to $747 at the W Hotel, with an average of $506. By comparison, Las Vegas published rates for the same months range from $119 at the Hilton to $476 at the Wynn., with an average of $239. If the Wynn is taken out of the average it drops to $192.
-- Miami Beach published rates on Tuesday and Wednesday nights for the same period, range from an average of $280 at the Palms to $661 at the W Hotel, with an average of $448. By comparison, Las Vegas published rates range from $74 at the Luxor to $353 at the Wynn, with an average of $206.
But Blumberg questions the point of the analysis. He thinks the data simply reveals what has always been obvious.
"Las Vegas is not a comparable market to Miami Beach and it never was," Blumberg said. "We're always going to come out with a higher rate. You want to compare us to New York, New Orleans or Atlanta."
(c)2011 The Miami Herald
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