The active pace of development that has marked the Miami hotel scene in recent months continued this summer on a variety of fronts. Hilton Hotels Corp. in July announced that it would manage a new deluxe hotel that is part of a mix-use development in the downtown financial district, while Hyatt Hotels Corp. announced a December opening for the Hotel Victor next to the famous Versace mansion in trendy South Beach. In addition, the previously announced Four Seasons Miami is scheduled to open downtown next month
(BTN, May 12).To complement these openings, meanwhile, an established hotel in August underwent a high-visibility conversion: The Renaissance Miami Biscayne Bay became the Radisson Hotel Miami. Also in the works, Regent International, which like Radisson is part of Carlson Hotels Worldwide, in July announced plans to open a condominium hotel, the Regent South Beach, in late 2004.
Like other key U.S. business travel destinations, Miami has seen a sharp decline in the number of new hotel projects entering the development pipeline. In fact, the second quarter saw the pipeline nationwide reach an all-time low
(BTN, Aug. 25). Building deluxe and upper upscale hotels in such markets as Miami is a complicated process, especially because barriers to entry are so steep. Consequently, projects coming online in mid-2003 and 2004 easily could have been several years in development.
For travel buyers, a stream of new properties coming into an established market is a desirable development, particularly when business travel demand is as weak as it has been the past 18 to 24 months. Additional inventory translates into greater competition among hotels, which, in turn, translates into buyers having more negotiating leverage. In addition, new hotels in a market typically offer unusually attractive rates as a way of building trial usage.
In the recent economic downturn, Miami hotels have fared better than those in many comparable cities. For example, on a per room basis, the value of Miami hotels in 2001 and 2002 slipped $34,000, according to Stephen Rushmore, president of HVS International, which assesses hotel valuation. By contrast, however, the value per room of hotels in New York, San Jose and Boston during the same period plummeted $172,000, $144,000 and $120,000, respectively. Similarly, Rushmore projected that the value of a Miami hotel room between 2002 and 2006 would increase $62,000, while across the United States the increase only would be $38,000.
The new Hilton property will carry the flag of Hilton's deluxe Conrad brand. It is the first Conrad in the United States to be built from the ground up and only the second U.S. Conrad hotel, after the Waldorf Towers in New York was converted to a Conrad last year. Thirteen other Conrads are located around the world, primarily in Europe and Asia.
"Our strategy is to create a presence for the brand in the key gateways. Accordingly, Miami made sense since it is not only an important business destination domestically, but serves as a gateway to Latin America," said Dieter Huckenstein, Hilton president of hotel operations.
The Conrad Miami's Brickell Avenue location is becoming a self-contained Miami hotel sub-market unto itself. It's already home to the Four Seasons, the Mandarin Oriental and the InterContinental. The 203-room hotel is part of a development called Espirito Santo Plaza, named for a leading Portuguese bank, and includes office space and apartments.
In addition to being the headquarters of many of the city's financial services companies, the Brickell Avenue neighborhood is convenient to the Port of Miami and Coconut Grove.
The South Beach location of the Hotel Victor, by contrast, is known for its trendy atmosphere and lively nightlife. Within the Hyatt portfolio, the 91-room hotel is unique because it is not being marketed as a Park Hyatt, Hyatt Regency or Grand Hyatt. Rather, the profile that's being created is of a more independent hotel. It is named for the Victor Hotel, a Miami Art Deco fixture that originally opened in 1937, but subsequently was torn down. In contrast to many South Beach boutique hotels, the ambiance at the Victor will not be bare minimalism. "Rather, the look and feel we're after is more opulent with the emphasis on bold color," said developer Steve Patterson.
The conversion of the 528-room Renaissance Miami Biscayne Bay to a Radisson drew special attention because the property had been marketed by Renaissance's parent, Marriott International, to travel buyers and meeting planners as part of a Renaissance Greater Miami collection that included the Eden Rock Miami Beach Renaissance and two Renaissance properties in nearby Fort Lauderdale. The Biscayne Bay property since late 2001 had flown the Renaissance flag, and Wyndham managed it prior to that.
Unlike the new Conrad, Four Seasons or Hotel Victor, the Radisson Miami Beach is positioned as a property suited for large meetings. Its 43,000 square feet of meeting space includes a large ballroom and is divisible into 23 breakout rooms. A plus for planners is that the property's meeting space is all on one floor, which makes directing attendees to proper rooms less of a challenge.
For Radisson, the addition to the portfolio actually is its fourth Miami flag. "The hotel is a key addition for us in the southeastern United States and a good example of the quality property we want to add in key markets," said Bjorn Gullaksen, Carlson executive vice president for full service hotels, citing both meeting space and location.
The 80-suite Regent South Beach will have a highly residential feel, including eat-in kitchens and upgraded bathrooms. Like other condominium hotel projects, owners of Regent South Beach units will be entitled to occupy them at certain times, but for the remainder of the year they will be available for transient bookings.