Study Indicates Economic downturn more detrimental than 9/11
The economic downturn– which peaked on September 15, 2008 with the bankruptcy filing by Lehman Brothers– touched every corner of our world in unique and significant ways, including South Florida’s hospitality and tourism industry. Remarkably, studies are now revealing that the effect of Lehman’s collapse on South Florida’s hospitality and tourism industry appears to have been more detrimental than the 9/11 terrorist attacks.
According to The Miami Herald, who tracked revenues of South Florida hotels following each crisis, “the numbers show the post-Lehman downturn was harder on hotels than was the post-9/11 downturn.” The impact on Broward County was even worse post-Lehman, since Broward was less affected by restrictions on international travel post-9/11. For Miami-Dade, the numbers post-Lehman and post-9/11 were almost the same, highlighting the magnitude of the post-Lehman effect.
On the Rebound
Thankfully, four years later, the nation (and Miami) are on the rebound. Lodging Econometrics, which tracks the hotel industry globally, reported last month that in the “past four quarters, constructions starts for U.S. hotels are up 32% by room count from the same period a year ago.” Lodging Econometrics attributes the construction rebound to rising occupancy and room rates since 2009 and a willingness by lenders to grant more construction loans. This turnaround over the last few years indicates a new confidence by owners and lenders alike.
As an unparalleled destination, Miami Beach is no exception. In addition to the resurgence of unprecedented sales and renovations in the Miami hotel market, there is record international and domestic travel to Miami – an increase of +6.9% in the first six months of 2012 (as compared to 2011), accentuating Miami’s unique draw and resilience. We see this specifically through the reporting data for Revenue Per Available Room (REVPAR). For August 2012, REVPAR was up +3.2% from 2011, helping lead Greater Miami and the Beaches to a #4 ranking in REVPAR for January – August 2012.
We will not quickly forget the economic struggles that faced Miami and the world following the 9/11 terrorist attacks and the Lehman collapse, but we look forward to the continued recovery and increase in construction, occupancy and revenue.