Cruise traffic is up in South Florida. Here’s what that means for the hotel industry
The number of cruise passengers in South Florida grew in 2019 continuing a five-year upward trend. That means a boost for hotel development and room rates, too.
PortMiami had 6.7 million cruise passengers in 2019, up from 5.59 million in 2018, according to the commercial real estate brokerage and property management firm JLL.
Port Everglades in Fort Lauderdale also experienced an uptick in visitors, from 3.87 million in 2018 to 3.9 million in 2019.
The uptick in activity will draw more foreign investors, development and an increase in room rates for the industry, said JLL Hotels & Hospitality Group Investment Sales Managing Director Gregory Rumpel.
“Most people taking a cruise fly in the day before departure,” Rumpel said. “That’s going to benefit hotels.”
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Foreign investors see the activity and want a stake in a growing hospitality market, Rumpel said. He’s seen an uptick in investors from the Middle East since last year.
New hotel supply increased since 2015 and will continue to grow over the next five years, Rumpel said. Markets outside of Miami Beach, including the downtown core and Brickell, are expected to see an uptick in inventory.
Passenger growth and the addition of new terminals in PortMiami is already stimulating hotel development. Hotel brands are expanding in the Miami Beach market, from budget-friendly Sonder to the upscale luxury brand Aman.
Miami Worldcenter developers hope to tap into the cruise passenger growth, too, with the addition of three hotels to the 30-acre site in downtown Miami, including a Marriott Marquis, citizenM and Legacy Hotel & Resort.
Room rates are likely to continue increasing, at least for some sub-markets in South Florida, despite more supply, Rumpel said. His team expects a modest growth between 1% and 1.5% for revenue per available room — room rate multiplied by occupancy rate — across Miami-Dade County and Broward in 2020.
Hotel occupancy increased by 2.5% in Miami-Dade from 2018 to 2019, according to data by the Greater Miami Convention and Visitors Bureau released in December 2019. But rates countywide dipped by about 0.8% from 2018 to 2019. Some areas — Miami Beach, Coconut Grove, Aventura and Sunny Isles Beach — did see a slight increase.
