"Florida hotels are still performing below 2001 levels but have been steadily improving over the last six months," Mark Lunt, E&Y's Southeast/Caribbean hospitality practice leader, says in a prepared statement.

Orlando is "faring the best, where the hotel market is expected to finish the year stable with 2001 and has the most positive outlook for 2003," Lunt says.

Tampa, "without a glut of new supply to contend with, recovered faster than other Florida markets and is closing the gap on Orlando," Lunt says.

But Miami, "more dependent on Latin America, corporate travel and conventions, is facing the toughest challenges, and is anticipated to continue in negative territory through early 2003," the researcher says.

Economy.com analysts maintain just the opposite.

The Pennsylvania researcher says Miami is receiving more investment dollars from Latin America than any other area in Florida. That flow of capital is helping the general South Florida economy and the hospitality sector recover better than other areas in the state, the researcher finds.

Economy.com statistics place Orlando in the lower half of a ranking of 318 metropolitan areas based on growth in employment, personal income and gross metro product.

Orlando is ranked 182 in employment growth; 118 in personal income growth; and 222 in gross metro product growth. In 2001, Orlando was ranked 150, 37 and 81. For 2003, however, Economy.com projects metro Orlando's ranking in the three columns will improve to 33, 92 and 72.

In 1992, metro Orlando was ranked fourth in employment growth. This year, however, Economy.com predicts the area will lose 3,500 jobs.

Still, Orlando hotel occupancy rates are improving faster than any other Florida market, Ernst & Young's Lunt contends. "Although still below normal," the researcher says Orlando's occupancy was down 14.6% in January of this year. By June, the decline was 5.9%. Tampa was down 12.2% in January and 6.6% in June. Miami was down 13.5% in January and 9.6% in June.

Lunt argues Orlando's recovery is already on its way. Using statistics from Smith Travel Research Inc. of Hendersonville, TN and the Orlando Convention & Visitors Bureau, Lunt says "despite significant declines in air traffic, convention center attendance increased 8.4% for the year through May 2002."

He says that showing was "driven primarily by strong performance in January and February (increase in local consumer shows) and in May (increase in trade show)."

Lunt says market representatives he has interviewed "indicated that corporate group meetings are still well below pre-9/11 levels, while association groups were less impacted." Overall group bookings have increased.

"Many operators are accepting group business in advance, relative to corporate and leisure transient guests," Lunt finds. "In some cases, group rates are $10 to $15 greater than corporate transient rates."

Six-month average daily rate numbers show Orlando with $61.68 versus $68.42 last year at this time. Tampa has $74.83 versus $88.83 in 2001. Miami averaged $74.83 compared to $88.83 in the first six months of last year.

Lunt says most operators will continue to discount room rates slightly for the rest of year to improve occupancy figures.

Most major new hotel construction, meanwhile, is on hold. Among the new products are the half-completed 5,760-room Disney Pop Century Hotel, the largest hotel the theme park operator has ever built; the 1,500-room Hyatt; the 1,200-room Hilton; and the 1,000-room expansion of the 800-room Peabody Hotel next to the Orange County Convention Center.

Still under construction are the 1,000-room J.W. Marriott Hotel and the 584-room Ritz-Carlton, twin projects both scheduled to open in mid-2003. On the drawing boards is the 730-room Omni at ChampionsGate in Osceola County.

Instant Insights /

Orlando Hotels Recovering Quickest, Ernst & Young Study Says

Related Stories

Recommended For You