Hotels in sun-drenched Miami are getting burned by a pullback in Brazilian travel and a building boom that has added thousands of rooms to the market.
When it come to Miami’s hotel market, nightly room costs are dropping. Greater Miami’s revenue per available room — a key measure of rates and occupancies known as revpar — has fallen each month this year, and in April was the worst of the top 25 U.S. markets, according to STR, a data provider for the lodging industry. Marriott International Inc., set to become the world’s largest hotel operator, said on its first-quarter earnings call that Miami is among its weakest U.S. areas.
The city, known for its Latin American influences and trendy South Beach party scene, is being hit by too much hotel supply and not enough demand. An unusually mild winter in North America has curbed visits, while Brazilians, a major source of tourism, are pulling back as the country’s currency slumps and its economy is mired in recession. Developers who rushed to take advantage of soaring interest by wealthy tourists are now facing the prospect of a glut of rooms, particularly at the high end.
“Miami has been this go-go-go market and now we’ve got to take a breath,” said Gregory Rumpel, a Miami-based managing director for commercial-property broker Jones Lang LaSalle Inc.