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Despite shootings, Miami Beach hotels made a lot of money during Memorial Day Weekend

Travelers during Memorial Day Weekend.
Travelers during Memorial Day Weekend.

Despite fatal shootings, a major event imploding and gunfire sprayed across the Palmetto Expressway, the most eventful Memorial Day weekend in recent memory was a money maker for Miami Beach’s hotel industry.

Going into Memorial Day this year, the city of Miami Beach made a push for a more diverse schedule of events, adding the military-themed Air and Sea Show and the LGBTQ-themed World OutGames to its usual roster of Urban Beach Weekend festivities.

The city was hoping to entice locals to staycation in Miami Beach and boost Miami-Dade County’s hotel industry after nearly a year of declining hotel numbers. Memorial Day Weekend seemed to have done the trick, tempering some of the challenges hotels faced in May overall.

Hotel rooms in Miami Beach were 12 percent more full on average on the four days of Memorial Day Weekend, May 26 to 29, compared to Memorial Day Weekend 2016, according to data analytics firm STR. That accounted for a 12 percent bump in overall revenue. Room nights sold jumped 14 percent on average over the same weekend last year. Hotels increased their rates by only 1 percent on average this Memorial Day from the previous year, from about $258 to $260.

“It was a combination of the events, as well as I know some of our hotels were busy too with weddings that weekend [and other group events],” said Wendy Kallergis, president and CEO of the Greater Miami and the Beaches Hotel Association. “It was a combination of really everything.”

12 percent Increase in revenue at Miami Beach hotels during Memorial Day Weekend compared to the same weekend last year

But some of the traffic Miami Beach attracted over Memorial Day were ultimately disappointed athletes who traveled from as far as Australia to compete in the OutGames, only to find out on the first day of the 10-day event that most competitions had been canceled. World OutGames Miami organizers are now under criminal investigation for the collapse of the event.

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U.S. Coast Guard HH-65 Dolphin does a demonstration of an ocean rescue. The simulation is part of the Memorial Day Air and Sea Show on Miami Beach on Saturday, May 27, 2017. Sebastián Ballestas sballestas@miamiherald.com

On Sunday night of Memorial Day Weekend, an argument over a Miami Beach parking space left two men dead, sparking a debate over restricting alcohol sales and noise during future high-traffic weekends. (The hotel association opposes those restrictions, Kallergis said). Then early Monday morning, a driver fired off at least 108 rounds from an AK-47 and handgun at other drivers and police officers in wrong-way traffic on the Palmetto Expressway.

The events of this Memorial Day Weekend created doubts about the future of major holiday weekends in Miami Beach. But organizers’ original intent seems to have been met, at least somewhat.

Video captured by a bystander show the moments after a police-involved shooting on Miami Beach left one man dead during Memorial Day Weekend.

After a six-month downward streak in room nights sold in Miami-Dade that ended in April, hotels were able to hold on to 1.9 percent positive growth in room nights sold during May, according to data released Tuesday by STR. Revenue remained about flat last month compared to May 2016, increasing by 0.1 percent.

May’s numbers still reflected some of the challenges hotels have faced since last summer — albeit at a lesser degree.

It’s a continuation of the deceleration the market has been experiencing since last summer.

Scott Berman, Miami-based industry leader for hospitality and leisure at PwC

Overall, for the month, hotels in Miami-Dade were 2.4 percent less full, at 75 percent occupancy, and hotel rates dipped by 1.7 percent compared to May 2016. The average room rate in May was $171. Hotel revenue per available room dropped 4.1 percent.

“It’s a continuation of the deceleration the market has been experiencing since last summer,” said hotel expert Scott Berman, Miami-based industry leader for hospitality and leisure at PwC.

Choked by a nearly 5 percent increase in the number of hotel rooms this year, Miami-Dade hotels have struggled to keep their room rates up and hotel rooms full. Also contributing to a slowdown: the spread of the Zika virus last year, construction at the Miami Beach Convention Center, the growth of short-term rental platforms, such as Airbnb, and a political climate that has kept some international travelers away.

Man fires AK-47 pistol at cars and cops on Palmetto Expressway

After the success of Memorial Day Weekend — for hotels, anyway — hotel performance slipped again in the days following the shooting, according to STR.

Like any global destination, Miami needs to continue to promote itself and support its demand drivers, such as the convention center and airport, to ensure that demand continues to grow long term.

Max Comess, an executive at Johnson Resort Properties

“Overall, there’s no doubt that demand growth has slowed—although still growing positively—at the same time as a glut of new hotels have come online,” said hotel expert Max Comess, an executive at Johnson Resort Properties. “Like any global destination, Miami needs to continue to promote itself and support its demand drivers, such as the convention center and airport, to ensure that demand continues to grow long term.”

In Broward County, hotels also struggled across the board in May.

Room nights sold were about flat compared to May 2016, increasing by 0.1 percent, while revenue dropped by 0.6 percent year over year.

Hotels were 0.4 percent less full, at 75 percent occupancy, marking the eighth month of declines (except for a slight bump in March). Room rates were also lower, by 0.7 percent at $123 on average. Overall, revenue per available room declined 1.1 percent in May versus the same month last year.

Chabeli Herrera: 305-376-3730, @ChabeliH

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