The premise that every major convention center has a headquarters hotel applies to major convention cities. But Miami Beach is not a major convention city like Orlando, New Orleans and San Diego.
It’s a destination for conventions of a certain size. It’s the only city that has an ocean and a beach.
Why is that important?
Other convention centers have supporting hotels that provide room blocks and required rates. Beach hotels, other than the Loews or Fontainebleau, historically have never participated in room blocks.
As for rates, oceanfront hotels enjoy high rates year round and will not lower them.
The city, per agreement with Portman Holdings, the developer brought in to build the convention center hotel, can require it to lower rates in order to book a meeting.
Will this 800-room hotel draw large conventions? No!
Most large groups interested in coming to Miami Beach require from 6,500 to 9,000 rooms.
A recent Miami Herald article said two conventions might come only if there is a headquarters hotel. One has 12,000 attendees, the other 19,000.The headquarter hotel is only required to provide 600 of its 800 rooms for a convention.
Where will all those attendees sleep? Does anyone, based on history, believe these 600 rooms will result in large conventions?
Some suggest a smaller hotel. Wrong! Industry standards say a convention center the size of the Beach’s requires a minimum of 800 rooms to be a headquarter hotel.
Then there’s traffic. The proposed hotel on 17th Street was supposed to create less traffic. The voters didn’t buy it.
Now there’s talk of the “P lot,” currently a parking lot west of the convention center. It might sound like a good idea but tell that to the residents on Meridian Avenue and further west, which includes single-family homes and apartments. Meridian is not as wide as 17th Street.
Talk about traffic! If the hotel is on the lot, and you are driving north on Meridian, will you be able to see the Holocaust Memorial?
In 1987, when the expansion of the Center began, the late George Kirkland, then president of the Great Miami Convention & Visitors Bureau, and I created a booking policy allowing the Center to be used for conventions, not consumer chows. Sound familiar?
Here’s the difference: Convention Center occupancy is currently around 70 percent, the majority of which are consumer and trade shows.
How did that happen? Simple. The lack of participating hotels, the same problem that exists today, forced the Center to welcome back these shows.
Not waiting to see if the referendum passed, the city, anticipating replacing these shows with conventions, changed its policy months ago, making it difficult for these shows to use the Center.
The boat show, auto show, jewelry show and others have found other homes or are negotiating for new venues.
Even though Art Basel is the second-largest traffic generator, the city could not live with the boat show, despite its huge revenue benefit.
Some elected officials and industry people now question spending $600 million on the Convention Center. But it has not been updated in 29 years Hotels update every eight to 10 years. Conventions that do enjoy the Center are on record as saying they won’t come back until it is renovated. Art Basel, growing every year without a headquarter hotel, demanded the renovation.
In the hotel business, “It’s easier to book returning guests than to get new ones.” Not only will the renovation result in these groups returning, but new ones of equal size will come.
The national hotel industry is smart when it looks at building new hotels. Miami Beach has benefited from these decisions. However, there was only one legitimate bid this time, and if Portman decides not to try again, professional wisdom says there will be no takers.
Miami Beach should take stock of what it has now. Hotel occupancy and rates, which some claim are declining, are strong; bed-tax collections, in the millions, are off the charts, 95 percent of which the city uses to improve quality of life for its residents.
The Convention Center enjoys good occupancy and overnight visitors and, according to the Bureau, have broken all records.
Does it need 600 more hotel rooms, four blocks from the ocean in a residential area with traffic issues and discounted rates?
Stu Blumberg is past chairman of the Miami Beach Convention Center Advisory Board and past president of the Greater Miami & The Beaches Hotel Association.