South Florida starts summer tourism season. Will the usual discounts arrive?
Memorial Day weekend marks the beginning of summer travel, which traditionally in South Florida means low season, reduced hotel rates and resident discounts on lodging, meals and various recreational activities.
With inflation, increased hospitality labor costs and Miami being one of the most-visited destinations in the United States, tourism businesses have little incentive to lower their prices this summer as they’ve typically done prior to the pandemic.
“Since the pandemic, the typical cycle with high and low in southeast Florida has completely changed,” said Christian Glauser Benz, the senior vice president of development for Dream Hotel Group, the owners of Dream South Beach on Collins Avenue in Miami Beach.
“The city’s becoming a yearlong destination,” he said, attributing the change to the simple fact that Florida remained more open during the pandemic, the remote workforce here and the changing population.
It’s well-documented that many more Midwesterners and Northeasterners now live year round in Miami, rather than only during the winter months. And their families, friends and business associates visit them throughout the year.
“Lots of people who moved here to live, they brought a whole new ecosystem to the city,” Glauser Benz said, noting events and technology conferences like the annual Bitcoin conference held in April.
With leisure and business travelers and visitors coming by car, airplane and ship as much in spring, summer and fall, it’s clear the cheap vacation week or weekend trip to South Florida made in previous summers are no longer going to be considered a bargain. It’s likely visitors to Miami-Dade County this summer won’t find discounts at hotels, restaurants and destinations from prices tourists paid during the prime winter months.
Peter Ricci, the director of the hospitality management program at Florida Atlantic University, said the pandemic “disrupted the tourism flow quite a bit. Our usual summer downturn is much less noticeable than it was before.”
When the COVID-19 vaccine was widely available across the country last summer, he said domestic travel picked up rapidly and many people chose South Florida for their summer vacation. However, the number of visitors to Miami-Dade hit a record last year, indicating plenty of tourists and business travelers came during each of the other seasons, too.
“Last summer, (hotel) rates didn’t go down to normal summer rates and neither did demand. The summer saved many tourism businesses here,” Ricci said. “Inflation and labor costs have gone up, but places haven’t had to lower prices because of demand.”
From October 2021 through March 2022, Miami-Dade County had the best-performing hotel market in the country, with a 73% occupancy rate, followed by Tampa, Phoenix and Orlando. During the same period, Miami-Dade hotels were the most expensive in the United States, with an average daily room rate of $280, a 40% increase on average in the same stretch of 2019 and 2020. That average overnight room price exceeded the infamously expensive island of Oahu in Hawaii, New York and Los Angeles. In April, the county’s average room rate jumped to $310.
Visitors are staying in short-term home rentals, too. Last year, Airbnb hosts in South Florida were among the top earners worldwide among those who use the online operator to book overnight guests. The company said that 710,000 Airbnb users visited Miami-Dade in 2021, paying hosts collectively $200 million. That amounts to about $4,700 for each host.
The start of the summer tourism season this weekend shows Miami’s momentum as a desirable destination is not slowing down from the customarily busy winter season. Miami International Airport is expecting its busiest Memorial Day weekend ever, with 600,000 passengers expected to pass through security between Friday, May 27 through Monday, May 30. The airport has been averaging 150,000 passengers daily for the last 30 days, up from 126,000 passengers a day during the same holiday period in 2019.
Last year, Miami-Dade made a big tourism comeback, recording 24.2 million visitors, a new record narrowly surpassing its pre-pandemic annual visitor number despite consumer prices for almost everything consistently on the rise.
To match or exceed that many tourists presents a challenge for area hospitality operators. It’s clear the county can’t afford a slow summer season, even though the pandemic remains a threat and virus cases in Florida and many parts of the country have increased in May.
“Last year was such an outlier and we do anticipate some of that same dynamic,” said Rolando Aedo, the chief operating officer of the Greater Miami Convention and Visitors Bureau, Miami-Dade’s destination marketing agency.
“Our profile has never been higher,” Aedo said. “We’ve got to continue to maximize the high travel demand and let the hotels push rates. Our current challenges are not on the demand side, but with everything we’re seeing in the economy.”
Nonetheless, Aedo said the visitors bureau’s low-season summer discount programs will return, including Miami Spa Months, which gives locals discounts at Miami-Dade’s hotel spas in July and August and at Miami Spice, where participating restaurants give discounted three course meals, in August and September.
But Aedo acknowledged that generally summer discounts this year may be less than previous summers.
“There will be values and discounts, but they will be different than in the past and maybe not as deep of discounts because of inflation and high labor costs,” the tourism marketing executive said.
Glauser Benz, of Dream Hotel Group which in January announced a new 165-room luxury hotel near downtown on the Miami River, said that the hotelier doesn’t anticipate lowering summer rates at the Dream South Beach and he expects tourist demand levels to hold for four to six months.
“Our rates have been breaking records, so we don’t see a reason to bring them down,” he said. “When things like inflation and fuel prices become prohibitive and consumers become more mindful about price, then yes, but so far we haven’t seen that. We don’t have any real reason to lower our prices.”
Another factor holding up South Florida tourism demand in a post-lockdown world are cruises. With hundreds of them canceled due to a yearlong shutdown of the industry in the throes of the pandemic, cruise fans have been using their voyage credits since the industry restarted last June.
While cruise passengers are less valuable to Miami-Dade than land-based tourists, many spend at least a night or two at local hotels before or after trips from PortMiami, a global cruise hub.
Michael Hooper, the general manager of the Hilton Miami Airport Blue Lagoon said that cruise passengers, many of whom are using cruise credits from pandemic cancellations, as well as group cruises, have helped fill the hotel and allowed it to keep rates high.
Glenn Sampert, the general manager at the Intercontinental Hotel, right next to Bayfront Park and the cruise port, also said that the property had gotten a bump in bookings thanks to the return of cruising.
Looking further ahead, certain tourism industry leaders are wary to predict that these robust visitor trends will last beyond the medium-term. Many economists have warned high inflation and fuel prices soon could lead to global recession. From previous downturns, it’s clear leisure travel is one of the first things consumers cut back on.
Ricci, the FAU hospitality management professor, said the “pent-up demand to travel” factor eventually will run out, and that the high costs prompted by inflation from paying in-demand workers greater wages may catch up to hospitality businesses.
“If recession hits and a slow tourism period comes, businesses will be fully staffed with workers they’re paying higher than ever before, and I’m very worried what will happen to that workforce,” he said.
This story was originally published May 29, 2022 at 6:30 AM.
