Miami area hotel prices took a rare dip over New Year’s Eve

Travelers to the Magic City got a respite over the holidays as Miami-area hotels lowered their prices from one year earlier.

Average daily rate for Miami-Dade County hotels for this past New Year’s Eve, or Dec. 31, was $414.46 according to data provided to the Herald by CoStar, a national provider of financial information and commercial real estate analytics. That was down 9.5% from $458.17 one year earlier.

While those rates are still out of reach for many Americans, they mark a rare adjustment for Miami-Dade’s lucrative hotel industry and for the metropolitan area which for the past 12 months has produced the highest inflation among United States metros.

RevPAR, or revenue per available hotel room, fell by 6% from $373.58 to $350.62 for the last night of last year.

Average daily rate also dropped on Dec. 30, by 6% from $436.56 to $410.93. On Dec. 29, it went up slightly from $400.60 to $401.44.

“Hotels actively reduced their New Year’s Eve rates this year compared to last year,” said Daryl Cronk, director of the southeastern U.S. for CoStar, in an interview.

CoStar surveyed about 350 hotels in Miami-Dade County.

They now face a hyper-competitive environment, he said, and so, “hotels have to compete more on rate.”

Hotel owners did have something to rejoice about: lowering rates seemed to pay off. Occupancy on this past Dec. 31 rose to 84.6% from 81.5% one year earlier. It also climbed on Dec. 29 and Dec. 30.

South Florida’s hotel industry benefited enormously during the pandemic as this area was one of few destinations in the world that essentially kept beaches and other visitor attractions open. That drew tourists and also immigrants from other parts of the United States and the world. Hotels jacked up rates, becoming some of the costliest in the country.

But since last year, the world has opened up. Travelers have many other places to go in the United States, Europe, Asia and the Caribbean for vacations. The cruise industry is booming.

Tourism to South Florida softened in the first half of last year and some even cited “Florida fatigue” as one major factor, describing people who had come to the Sunshine state multiple times during the pandemic but were now going elsewhere.

“For a while, South Florida was the place to go,” said Cronk. But, “it’s now a much more competitive environment today.”

While full year data is not yet finalized, that price cooling likely extended throughout 2023 and early 2024 the CoStar executive said.

That is because the average daily rate for Miami-Dade County hotels for last year through Nov. 30 was down about 6% according to the consultancy. Hotel occupancy fell about 2%.

But the demand is there: Miami is “seeing a return of the international market,” said Rolando Aedo, chief operating officer of the Greater Miami Convention & Visitors Bureau, in an interview with the Herald.

The arrival of the world’s largest cruise ship, the Icon of the Seas, to PortMiami this week, will also be a “significant contributor” to increased need for hotel rooms, he noted.

With the ship’s capacity of 5,610 guests, that could signify at least another 1,000 hotel rooms per week, his organization estimated.

As Cronk said, “Miami still has a very robust hotel market in the U.S.”

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