The hotel industry is riding high as occupancy levels, ADR, RevPAR and most other industry indicators continue to climb skyward. And as most statisticians know, though financial rewards are being felt throughout all strata of the industry there are some markets that are doing just that much better than others. That?s because not every market is created equal and standouts such as Boston, New York, Miami and Orlando are proving to be whirlwinds of activity and financial strength.
As last week?s BITAC Purchasing & Design East, we took a deeper look into the characteristics of the above markets to decipher just what is making each of them so desirable by hotel guests as well as those looking to make some coin the in the hotel industry.
BITAC of course is the industry leading one-on-one meetings and relationship building event. Taking place ocean side at The Westin Diplomat, BITAC attendees are the ultimate group of insiders and decision makers. And they?re all here to come together for the most exciting BITAC to date to problem solve, network, sign deals and swap their thoughts they believe will move forward the quality of experiences for hotel guests while adding profits to the bottom line. But also to cut loose, be social and network in a luxurious and relaxed environment.
According to Bruce Ford, SVP Business Development with Lodging Econometrics, Boston?s Central Business District (CBD) is one of the most desirable markets in the country. ?Everyone who owns a hotel in Boston wants to own more, everyone who manages hotels in Boston wants to manage more there and all brands want to be there,? said Ford, noting it has the third highest ADR in the country.
A new convention center added?600,000 square feet of exhibition space seven years ago. It is as close as to the airport in Boston as the World Congress?Center is to the airport?in Atlanta. It has delivered on expectations and therefore eight hotels are scheduled to commence as well as?more than a dozen other commercial and residential developments.
Overall Boston/Cambridge CBDs have 4,000 of 5,700 new rooms in the pipeline for the region and the market is expected to be a Top Five construction market for the next three years, said Ford. Ford also thinks it will see RevPAR growth 10 percent annually with hotel values reaching all-time highs.
New York City also seems to have limitless potential as more tourists than ever continue to pour into the city each year. And hotel developers are working to give them plenty of new rooms to stay in too. Also, hotel executives feel if they are not represented in the market they are not playing in the Big Leagues.
?New York has seen three robust years of hotels openings and have three more in front of them,? said Ford, noting that in the 10 years ending in 2015 NYC will have added 25 percent to its overall room count, many of them in the select service segment. Between now and 2014 downtown will add thousands of rooms.
Ford said Marriott alone is building 14 hotels in Manhattan and will have 67 in the borough when those hotels are complete. Other market facts: Owners must renovate to compete, Rates will soften in the next two years and medium-sized and midscale hotels are most common.
Meanwhile Miami has quietly risen to become one of the most in demand markets for hotel development. ?It used to be a brand came into to the U.S. they wanted to be in New York and San Francisco. Now they are saying they want to be in [NYC and] Miami,? said Ford, noting this market?s growth has been most impressive ?by far? domestically.
Here at Hotel Interactive we see it this way: You have to be in New York City to be considered a player in the global hotel industry but to be one of the cool kids you have to have to be in Miami.
Other market facts: It?s the third highest RevPAR growth market in US, South Beach largely under branded so far giving the major hotel companies opportunity (especially for soft brands), year over year supply is growing by 14% and it is the most favorable Independent construction market in U.S.
?The brands want to be there [n South Beach], they are pushing very hard to get there,? said Ford.
Finally, Orlando is seeing quite a few transactions. There have been 22 transactions, which is the most in the U.S. during the last 12 months. On the renovation side there are 5,800 rooms under renovation, also the tops the U.S. and more than 2,700 rooms under constriction including the largest hotel construction project outside of China which is Loews? Cabana Bay. That hotel is focused more on the value minded family crowd on the property of Universal Studios which will need the rooms when it opens its Harry Potter expansion next summer.