The Miami Seaside tourism and hospitality trade is accelerating sooner than anticipated

Miami Beach’s tourism and hospitality industries are recovering faster than expected as resort tax revenues continue to be higher than projected. Instead of an expected 50% drop in sales from March 2019, the final year of normal operations, actual revenues only fell 9.6%. As a result, the city raised $ 4.3 million more than planned.

The March collections follow a better-than-expected February, when the city had forecast a 55% drop in resort taxes but instead saw only a 12.3% drop, resulting in additional revenue of $ 3.9 million led. Last September, the city passed a scaled-down budget based on the expected effects of COVID. However, after it became clear that the pandemic was causing more damage than planned, the budget was revised down even further to allow for a longer recovery period.

The overall resort tax decrease for March was 9.6% ($ 9,702,381, down from $ 1,031,661). The food and drink component and room rental fell by 10.3%, with F&B falling by 12.6% and room rental by 8.2%.

Miami Beach CFO John Woodruff said: “The numbers are very encouraging,” although he noted that “it is unclear whether the trend will continue to be as strong as other destinations” open up “as COVID restrictions ease and people have more perceived options. “

Rolando Aedo, chief operating officer of the Greater Miami Convention and Visitors Bureau (GMCVB), said the tell-tale indicators of a rebound were felt as early as December. With the start of recovery programs, including those of the GMCVB; the College National Football Championship game here, which, while different, nonetheless put the area on the national stage; and “a dose of bad weather in the north” converged on the reopening of Florida. “All of these things have enabled us to capture a huge, pent-up demand,” said Aedo. “We knew traveling wasn’t going to be much, but it was a matter of timing.”

By February, the hotels were “posting prices that exceeded 2019 levels, which really speaks to the strength of the destination and, of course, the Miami Beach and Greater Miami brands,” said Aedo.

“From what I hear from hotels, the lead generation has really focused on hockey when it comes to internal hotel meetings and group business,” he said. “We believe the second half of the year will be strong in this respect as well.” The Miami Beach Convention Center hosted the first medical meeting since it closed, Aedo added, with the Aesthetic Meeting in late April.

Current demand is just one leg of the stool, Aedo emphasized. The other two – the cruise industry and international business – haven’t started yet, which underscores the strength of the recovery. He is confident that the cruise will resume in July and that international travelers will return soon. The cruise industry is responsible for about ten percent of hotel bookings in our region on average, he said. Once cruises resume, “this will add further momentum and compression, and ours [hotel] Prices “which are” the highest in the country “based on total inventory.

The recovery is largely based on heavy domestic travel for now. The GMCVB Recovery Index shows that trips to Miami International Airport (MIA) accounted for 82% of trips in 2019 and the total number of overnight stays was around 93%. The index does not correspond to occupancy, which measures the total number of rooms, but to the number of rooms sold (and flights) compared to previous periods, in this case 2019.

The demand for restaurant reservations has also risen sharply, he said. Using Open Table as a benchmark, the number of reservations a few weeks ago was 135% from the previous period and is now around 125%. This means that 25% more reservations are made through Open Table than two years ago.

Aedo also points to an expanded service for MIA due to demand. American Airlines has moved some of its larger planes from other cities to Miami and increased the number of flights. Southwest and Jet Blue are now at work here too. “Those airlines never flown in and out of Miami on MIA, which is significant,” he said.

“It was brutal,” said Aedo about the last year. “Our industry has taken it harder than most of the others, but the recovery is progressing much faster than many hotels expected.”

Aedo is optimistic that Miami Beach and the greater Miami area will continue to shine as the rest of the country opens up. The crisis, he said, enabled the GMCVB to remind people of all the many outdoor spaces and activities that “top the list of the types of destinations people are looking for” and the number of residents here increase travelers by focusing on the family-friendly features.

The resort tax and city budget

Woodruff will lead a budget retreat later this month where city commissioners will begin talks on the fiscal 2022 budget and preliminary projections. The city’s fiscal year runs from October 1st to September 30th.

“I am now optimistic that we will meet or exceed our revised guidance by the end of the fiscal year as most of our resort taxes are incurred during the high season,” Woodruff told RE: MiamiBeach in an email. “I recommend restoring the resort tax reserve used in FY2020 to balance the budget ($ 5 million) and allocating funds for next year’s spring break, which still has many questions about potential programming and public safety costs Has.”

“Next year, fiscal year 2022, is more uncertain,” he said. “We’re tentatively assuming 85% of normal resort taxes as conventions and meetings are still on track and some people may still be reluctant to travel.”

One of the other unknowns about the city’s general fund that Woodruff talked about last month is what property values ​​will look like. Woodruff expects a decline in commercial property values ​​and, as a result, a decline in property tax revenues. Given the impact COVID has on tenants and retail / restaurant revenues, commercial property owners have been expected to appeal their property valuations. The appeals expected by Woodruff were likely successful.