Business Monday

Miami Beach visitors have their pick of new (and old) hotels

The Thompson Hotel, 4041 Collins Avenue on Miami Beach, expects fierce competition for customers during the summer value season.
The Thompson Hotel, 4041 Collins Avenue on Miami Beach, expects fierce competition for customers during the summer value season. MIAMI HERALD STAFF

Miami Beach, long known for its independent boutique hotels and Rat Pack-era resorts, has ushered in a new breed of arrivals.

Since late 2014, six branded hotels — encompassing about 1,600 rooms — have opened along Collins Avenue, some as recently as last week.

The new offerings include luxe high-end lodgings such as eco-conscious 1 Hotel South Beach and the posh Miami Beach Edition as well as, most recently, the youth-focused (and mid-priced) AC Hotel Miami Beach and Aloft South Beach.

“We think it’s a great thing that Miami Beach will now have even more diverse offerings of hotel product,” said Rolando Aedo, chief marketing officer for the Greater Miami Convention & Visitors Bureau. “I think now the portfolio of Miami Beach is diversified, is well-rounded and will increase the overall attractiveness to the travelers at large in any demographic.”

Miami hotel consultant Scott Brush said hotels such as the AC, Aloft and Hyatt Centric, which also opened recently, fit into the “upper midscale” market that bankers are eager to finance.

The most recent properties are located west of Collins Avenue and off the beach, so developers haven’t paid a premium for waterfront property. Most of the sites were not being fully utilized: The AC was a contractor staging area for construction at the Miami Beach Edition across the street and had a future as a parking lot; the Hyatt Centric housed an old apartment complex, and the site of the Aloft, which housed a ramshackle motel, was originally intended to become high-end condos until the economic downturn hit.

Even if they don’t have direct beach access — or, in some cases, beach views — all of the newest hotels feature pools and will have on-site bars and restaurants.

While there are some differences between the three new brands, the hotels are all trying to appeal to modern travelers who embrace technology, crave social opportunities and have a deep interest in using hotels as a launch point to explore the destination.

“In Miami Beach, you have either really high-end properties, or you have almost hostel- type properties,” he said. “And there’s not much in the middle of the market. Things in the middle of the market have done very well.”

Developers say they saw a need and moved to fill it.

Robert Finvarb, whose development company was behind both the AC Hotel and the Hyatt Centric — which opened within days of each other earlier this month — said the beach’s product mix was missing newly built lodgings with manageable rates.

“I think that the inventory of rooms in Miami Beach needed this upgrade to allow the destination to achieve that next level of acceptance,” he said. “Alluding back to these historic, tired buildings whose owners frankly haven’t reinvested in their assets, it’s going to require them to bring their game up and their product to what are the needs of today’s travelers or they’re just going to fall by the wayside.”

Over the past few years, several Miami Beach hotels have been acquired, gutted, renovated, repositioned — and sold again. And more projects are coming online this year, including The Hall, a 164-room hotel from Joie de Vivre in late summer, the 250-room Nautilus and Faena Hotel Miami Beach, with 169 rooms, in the fall.

With more rooms to fill this summer than last, industry insiders are watching a slew of factors as the traditional value season approaches.

Economic woes continue in Brazil, a significant source for summer travel. And the strength of the dollar along with the relative weakness of foreign currencies could encourage U.S. travelers to head overseas — while keeping Europeans from crossing the Atlantic to summer in Miami.

Following 18 months of year-over-year increases in room rates, observers wonder if that level of growth can keep up into the next few months.

Scott Berman, Miami-based industry leader for hospitality and leisure at PwC, said there has been no indication yet that additional supply has had any negative effect on the market. But, he said, the South Florida hospitality industry is moving into the part of the year when “the market is going to get tested.”

“I do think this is going to be an interesting summer,” Berman said. “The first six months have been so good that I think the industry has built itself a bit of a cushion and it has to be a complete disaster to see any marketable change.”

No one is forecasting a disaster, but hoteliers and those who watch the market expect some new patterns to emerge this summer.

“What I think you’ll see is hotels really step up their efforts to go after the domestic traveler,” said Max Comess, a director in the hotel group at commercial real estate investment banking firm HFF.

He expects that effort to be boosted by the opening of the newest beach hotels, which are affiliated with Marriott, Hyatt and Starwood.

“The marketing engine, the reservation engine and the loyalty program, while those are all international drivers, they really tend to favor domestic travelers to drive domestic business,” he said.

Gabe Saglie, senior editor for deal site Travelzoo, said the new hotels could also be key to attracting younger travelers who are seeking sleek lodgings full of local flavor.

“It continues to be a desirable destination, and these brands help bring that new generation of travelers to a very hip and recognizable area,” he said.

Saglie said fresh concepts also keep the players who have been around longer on their toes.

“I think this new breed plays a role in keeping some of these more established hotels in check and encouraging these properties to become more imaginative and more creative and more aggressive in how they market themselves,” he said.

Even for some of the newcomers, the battle for summer business is already heating up.

In an interview last month, Brett Orlando, general manager of the 380-room Thompson Miami Beach, said he expects “fierce” competition during the traditional value season.

“We’ve put into place, in our opinion, a very competitive rate strategy plan to attract customers,” he said.

In addition to Florida resident rates, discounts for staying more than one night and resort credits, the hotel also partnered with Travelzoo to offer a package with rates starting at $155 a night for weeknights in June and early July. That rate will also apply for any day of the week between Aug. 16 and Sept. 30, with a waived resort fee and valet parking and breakfast included.

Eric C. Jellson, area director of marketing and strategy for Kimpton hotels in Florida — including the Surfcomber and Angler’s in Miami Beach — said the arrival of new properties does have a spillover benefit for existing hotels.

“With all of the new inventory that comes, comes increased press and increased interest into the beach,” Jellson said. “As increased interest and press comes into the beach, so does that interest and press come into Surfcomber and Angler’s and others. Everybody in some way benefits from this continued evolution taking place on the beach.”

But the new entrants (along with hefty launch budgets) also provide challenges.

“It does cause all of us to sharpen our tools,” Jellson said. “For us, it’s really about now taking advantage of who we are and not trying to be something we’re not to keep up with the Joneses, but be able to be confident in what we deliver as a brand.”

He said the 186-room Surfcomber especially has sought out new business partners and events that could build awareness, such as a partnership with New World Symphony and the American Red Cross.

The hotel, which relaunched as part of the boutique Kimpton brand after renovations a few years ago, is also running weekday deals through Travelzoo offering rooms between $129 and $149 a night, as well as upgrades and welcome drinks.

Aedo said hotels all over the beach will likely need to keep a “keen eye” on new competition and figure out the best way to respond.

“It compels properties to look at their business operations, to reinvest in themselves, and I think that is good for the consumers and it’s good for the hotel community,” he said.

Delray Beach resident Michael Ryba, who spends time in Miami Beach for work and leisure, said he enjoys having a variety of choices.

Ryba, an account executive with promotional products distributor Brown & Bigelow, said he found “options at all levels” when he was choosing a hotel. He ended up at the Marriott Stanton South Beach in the South of Fifth neighborhood.

“If you want to go all out, it’s there,” said Ryba, 50. “You want mid-range, it’s there. You want to go a couple blocks in and walk or cab it to areas, it’s there as well.”

When it comes to hotels, Ryba says the more the merrier.

“I think it’s great news and you can almost sense each hotel is trying to one-up the other in some kind of way,” he said. “So you can sort of take advantage of certain amenities or certain promotions.”

This article includes comments from the Public Insight Network, an online community of people who have agreed to share their opinions with the Miami Herald and WLRN. Become a source at MiamiHerald.com/insight.

By the numbers

Through April of 2015, Miami Beach hotels have shown a solid performance this year — especially when it comes to pricing. Observers are wondering whether the gains will stretch into summer.

Occupancy: 79.9 percent, a decrease of 2.1 percent

Average daily rates: $338.96, a 9.6 percent increase

Revenue per available room: $270.97, up 7.2 percent

Supply: 2.56 million room nights, up 5.9 percent

Demand: 2.05 million rooms sold, up 3.7 percent

Source: STR

Room rates

Even among new hotels in Miami Beach, a variety of prices are available. A search of six new hotels revealed these starting nightly rates for a weekend getaway beginning June 26 (Source: Miami Herald research):

Hyatt Centric South Beach Miami, 1600 Collins Ave. Contemporary 105-room full-service lifestyle hotel with restaurant and third-floor pool deck a short walk from the beach, 305-428-1234: $239

Aloft South Beach, 2360 Collins Ave. Modern, youthful 235-room property across from the beach with pool, sun and activity deck, bar and Stephen Starr restaurant in the works, 305-860-9444: $279

1 Hotel South Beach, 2341 Collins Ave. High-end eco-conscious beachfront resort with 426 rooms boasting four pools, multiple restaurants, living green wall and copious terrariums, 305-604-1000: $316

AC Hotel Miami Beach, 2912 Collins Ave. Sleek European import with 150 rooms, rooftop pool, bar and tapas restaurant across the street from the beach, 786-264-4720: $249

Miami Beach Edition, 2901 Collins Ave. Luxury 294-room beachfront resort with Jean-Georges Vongerichten restaurants, pools, nightclub, bowling alley and ice skating rink, 786-257-4500: $359

Thompson Miami Beach, 4041 Collins Ave. Upscale 380-room beachfront resort with midcentury-inspired decor, two pools, Michelle Bernstein restaurant and bars including a 1930s bungalow, 786-605-4041: $194.65

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