NORTH MIAMI BEACH, FL-With the rash of recent development, hotel occupancy rates throughout Florida slipped to 66.3% in the first six months of this year from 69.2% in 1996, according to Hendersonville, TN-based Smith Travel Research. Yet the industry has been able to increase profits by raising room rates, says the firm’s CEO, Randell A. Smith.

Speaking to a lodging industry conference here sponsored by Florida International University, Smith warned South Florida’s booming hotel business may be threatened if gasoline prices remain high for long.

However, room-rate wiggle room could soon be a thing of the past because rising oil prices will eventually cap continuing room-rate raises, Smith says. The price of travel by air and car for vacationers could crimp the industry. South Florida transient lodging is especially vulnerable to competition from cruises, condos, timeshares and corporate apartments.

Despite lower occupancies, Smith Travel reports 1999 hotel room revenues versus 1998 grew by 3.4% in the Miami area, 2.6% in Greater Fort Lauderdale and 7.4% in all of Palm Beach County. The year-to-year increase statewide was 3.4%.

The research firm remains bullish about hotel profitability despite ongoing gasoline price increases, a turbulent stock market, rising interest rates and tougher competition for traveler spending. Nationally, the industry is projected to make a $24 billion profit this year.

Another conference speaker, Jan L. Nichols, addressed falling hotel sales prices on a per-room basis since the REIT buying spree in 1998 inflated the market to record levels. Nichols is director of consulting services in the Miami office of HVS International. He says while market values of the state’s upscale hotels are still higher than replacement values, the difference has narrowed in the past two years.

During 1998, 97 Florida hotels were sold at an average $84,600 per room, Nichols notes. For all of last year, the average price fell 47% to $44,600 a room based on 66 sales. For the first half of 2000, there were 33 hotel sales statewide for an average price of $43,500 per room. The HVS statistics are based on individual hotel property sales of $3 million or more.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.