If you asked Miami hoteliers in January what 2021 would have in store for the city’s hospitality industry, likely none would have predicted they’d be charging higher rates for rooms than ever before.
But that’s exactly what’s happening as the recovery of Miami’s leisure and hospitality sectors during the COVID-19 pandemic far outpaces the rest of the country.
In June, Miami hotels charged visitors an average of $225.03 per night, according to data from STR, a hospitality data firm, up 49% from the pre-pandemic rate of $150.92 in June 2019. In contrast, hotels nationwide charged less — an average of $129.00 per night in June, down 4% from June 2019.
Miami hotels are also busier. Last month, they had an occupancy rate of 72.2%, far higher than the national average of 66.1%, according to STR.
After hotels in Miami-Dade County were allowed to reopen in June 2020, leisure travelers have been driving their comeback, while conventions and individual business travelers are still largely absent. Statewide, hotels are experiencing higher room rates than before the pandemic, bucking the national trend, even as Florida experiences a spike in COVID-19 cases. In June, Florida hotels had an average daily rate of $165.22, according to STR, up 25% compared to June 2019.
“Even though we’ve been pleasantly surprised, we have to be cautious,” said Neil Kukreja, owner of the 174-room Holiday Inn Miami North in Liberty City. “We have a brutal lesson from last year.”
The national hotel industry is warning of a long and uneven recovery ahead, with large conventions and regular business travel still rare. By year’s end, the industry will be short 500,000 employees, down $44 billion in room revenue and down 10% in occupancy compared to 2019, according to a new report from the American Hotel & Lodging Association.
“These findings show the economic devastation still facing hotel markets and underscore the need for targeted relief from Congress for hotel workers and small businesses,” said Chip Rogers, president and CEO of AHLA, in a statement.
Miami, however isn’t immune from the employment woes. There were 28,600 fewer people working in leisure and hospitality in Miami-Dade in June compared to June 2019, according to data from the Florida Department of Economic Opportunity.
Kukreja said he recently raised wages for housekeepers to $14 per hour from $11 before the pandemic, and is still not attracting enough staff to keep the hotel’s restaurant open full time. The Massachusetts Institute of Technology’s living wage calculator figures Miami-Dade’s living wage ranges from $33,441 and $105,804 per year, or from $16 per hour and $50 per hour for a 40-hour work week, depending on how many adults in the household are working and how many kids they have.
While remaining short staffed, Kukreja is shocked by the hotel’s success, reaching around 80% occupancy this summer. Domestic visitors are coming to Miami to party and international visitors are coming to get their COVID-19 vaccines, he said.
“Usually June and July are slow months,” Kukreja said, “but we are doing unbelievable.”
Pent-up demand and cabin fever are driving most people to Miami, said Rolando Aedo, chief operating officer of the Greater Miami Convention and Visitors Bureau. Last year, Miami-Dade County turned over $5 million in federal COVID-19 relief money to the CVB, which it used to fund a campaign called “Miami Land” to promote the county’s parks and natural attractions.
Aedo has worked with the CVB to lead Miami’s comeback from other crises that have put a big dent in tourism — Zika outbreaks, the BP oil spill, the Sept. 11, 2001, terrorist attacks — but he’s been surprised by the pace of the turnaround this time.
“Nobody anticipated the recovery we’ve seen,” he said. “We’re selling the same amount of rooms at a dramatically higher room rate.”
Large convention hotels like the 790-room Loews on Collins Avenue and 16th Street in Miami Beach are also doing better than expected, luring enough leisure travelers at high enough rates to partially offset the void of big meetings.
Mutluhan Kucuk, managing director of the Loews Hotel Group, which owns the hotel, said occupancy is still lagging, but some meeting business is returning, with more on the books for the end of this year and beginning of 2022.
“In July, there were days in the hotel where you would walk through the lobby and it felt like back in the days in 2019 how it used to look, it looked very similar to pre-pandemic days,” he said. “People in suits and jackets, networking, having a drink, it was nice to see that.”
On a recent weeknight at the 271-room Biltmore Hotel in Coral Gables, police chiefs from throughout Miami-Dade gathered for their annual meeting. Overnight hotel guests relaxed in the lobby, some reading books, others talking among themselves.
The Simpson family from Birmingham, Alabama, was checking in for a three-night stay to celebrate the birthday of 13-year-old Parker Simpson. His grandmother Sally gave him several cities to choose from for a trip to mark the occasion, including Chicago and Boston, and Parker chose Miami.
“It’s a cool, tropical place,” he said.
Sally debated reserving a room at a hotel in South Beach, but opted for the Biltmore for its history and architectural wonder. The family plans to go to a Marlins game, visit Key Biscayne and enjoy dinner at Joe’s Crab Shack.
Christy Woods, 51, was checking in with her boyfriend, who had work meetings scheduled in Miami on Friday and Monday. The meetings got canceled, but the couple decided to make the drive down from Amelia Island, Florida, anyway for a mini-vacation — their second to the Biltmore during the pandemic.
“We’ll exercise, play tennis, visit friends, eat out,” said Woods. “It’s the best.”
Tom Prescott, executive at the Biltmore, said he’s seen a lot of guests drive into town from around the Southeast. The golf course at the hotel continues to be a draw, even in the hot summer months.
“It has gone on unabated,” he said. “I’m surprised by just how strong that demand has increased.”
The 124-room SLS Brickell, traditionally dependent on business travel, has eclipsed its pre-pandemic performance with leisure visitors, said Marco Selva, area vice president at sbe lifestyle hospitality. The beach is still the biggest attraction, but Selva said more and more people want to stay in Brickell to be close to its restaurants and shopping.
“I would almost argue that Brickell as a destination has fared almost as well as the beach,” he said.
The Delta variant of the coronavirus has hoteliers wary about what the second half of the year might hold, but none interviewed for this story have seen a dip in business yet.
“We’ve made such incredible gains, we wouldn’t want a setback,” said Selva.