Rightfully So! | Miami Beach tourism takes a hit from Zika: demand drops, cancellations rise | SayNoToPesticides

 

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Miami Beach’s tourism industry has been able to swerve each time Zika has tried to deal it a major blow — until now.

Last week, Zika hit the $24 billion industry with an uppercut.

Hotel demand went negative for the first time since local transmission of the mosquito-borne illness was detected in Miami — at the now-cleared Wynwood area — on July 29. The number of room nights sold, which has been trending downward since the start of the month, fell to 2.3 percent lower than the same time in 2015, according to the most recent data from analytics specialist STR.

Then on Friday, Florida Gov. Rick Scott announced the Zika transmission zone on Miami Beach had tripled in size to encompass two-thirds of the tourism jewel. The zone now stretches from Eighth Street to 63rd Street, wrapping in with it hotels in Middle Beach, such as the historic Fontainebleau Miami Beach, the Eden Roc and the Faena district.

Asked if he is concerned about Zika’s impacts on Miami Beach’s tourism industry while meeting with local stores Thursday, Scott said, “Absolutely.”

Forty-one cases of locally transmitted Zika have been found on the Beach. Miami-Dade County remains under a travel advisory issued by the Centers for Disease Control and Prevention.

Panic has started to settle in.

“The fears of the destination community are being realized,” said Scott Berman, a Miami-based tourism expert at PricewaterhouseCoopers.
miami-beach-hotels-stung-by-zikaAt a standing room-only meeting between 40 hotels and the Greater Miami Convention and Visitors Bureau on Sept. 14, the tension at area hotels began to boil over.

The 1,504-room Fontainebleau reported suffering the worst three weeks in 15 years, according to a memo provided to the Miami Herald by the city of Miami Beach. Sixteen groups had canceled trips and two pending group bookings could potentially cancel their business for early 2017, according to the memo.

The hotel and the tourism bureau declined requests to confirm the cancellations. Bureau president William D. Talbert III said he did not remember whether the Fontainebleau had mentioned having cancellations at the meeting.

According to the memo, the 150-room Carillon, which is on 68th Street and outside the Zika zone, said it had lost $100,000 in short-term cancellations. And at the 326-room Mandarin Oriental on Brickell Key, the slowdown has seeped into the pivotal early December period during Art Basel Miami Beach. The hotel said bookings were not coming in at the usual pace, according to the memo. (In a phone interview, the hotel said that there hadn’t been a major drop-off in bookings.)

Basel-period bookings aren’t on track at the Loews Miami Beach, either, managing director Alex Tonarelli said during a site tour Monday.

At a Sept. 14 City Commission meeting, Miami Beach Mayor Philip Levine said the Loews had had more than 700 room cancellations.

“It’s been more than 700,” Tonarelli said Monday, but the hotel declined to give specific details.

THE FEARS OF THE DESTINATION COMMUNITY ARE BEING REALIZED.Scott Berman, a Miami-based tourism expert at PricewaterhouseCoopers

Other measures for Miami Beach are also showing the strain. Room revenue is down 6.1 percent year-over-year, revenue per available room is 11.1 percent under 2015 levels, the average daily rate dropped by 3.9 percent and hotel room occupancy is on its third week of decline at 7.5 percent below the same week in 2015, according to STR.

“I’ve heard that there are rates as low as $59 a night, which is like what I would call similar to [rates] after 9/11 for several hotels,” Mitch Novick, owner of the 20-room Sherbrooke Hotel on Collins Avenue, said in an interview.

Meanwhile, hotel supply is up by 5.7 percent year-over-year during the week of Sept. 17, a measure the tourism bureau said is the major driver behind lower numbers. Also driving down the numbers: a weak Latin American economy, a strong U.S. dollar, the growth of the short-term rental industry and a half-open Miami Beach Convention Center. September is also the slowest month for the tourism industry, making it more difficult for businesses and hotels to pinpoint what percentage of the drop-off in business is due to Zika.

Now, though, Zika’s impact is becoming clearer.

“There is no one trying to hide that this is getting increasingly more alarming,” Berman said. “What’s difficult to quantify is the lack of pipeline, meaning business that is not even calling.”

Talbert said some groups that were considering meetings in Miami in 2017 have instead said they’ll reconsider Miami for 2018. About 18 groups of 20 to 200 people have reported cancellations to the tourism bureau. That doesn’t include group cancellations at hotels that haven’t reported them to the bureau.

“As this issue continues, it’s what group business we are not booking,” Talbert said.

-2.3 percentDecrease in hotel demand on Miami Beach during the week of Sept. 17 compared to the same time last year.

Because meetings are scheduled months in advance, the impacts of the Zika scare could affect bookings for 2017 and 2018, Berman said.

“My fear is that Q1, when most of the hotels and resorts accumulate cash in order to offset other parts of the year, will be weaker,” he said. “My conversations with the hotel community suggest that the pick up is not where it needs to be for Art Basel.”

A spokesperson for the art fair said none of its exhibitors or partners have canceled their participation due to Zika and the fair has been in continual contact with the city of Miami Beach.

Still, LodgIQ, a hotel revenue management platform, said if current trends continue, December is likely to be the worst month for Miami Beach in the fourth quarter of the year.

Until then, the Beach is hoping some Wynwood good luck will rub off on it. Fifty-two days after Zika was detected in Wynwood, its designation as a Zika zone was lifted.

Despite strong objections from Miami Beach residents on the safety of aerial spraying, which resulted in one of the rowdiest City Commission meetings in recent history, Miami Beach has gone ahead with spraying and on-the-ground efforts similar to those used in Wynwood.

“It worked in Wywnood,” Talbert said. “It is going to work on Miami Beach.”

Weathering the storm

Despite the drop-off, some business on the Beach is holding strong.

Talbert said several groups have booked conventions in recent weeks: a 5,000-person convention of the International Bar Association booked for October 2020 and a meeting of the International City/County Management Association is set for January. The Race of Champions, an international motorsport event, is being held in the U.S. for the first time at Marlins Park in late January and the PGA Tour Latin America will stop at the Melreese Country Club near Miami International Airport in late November.

The Miami Beach Convention Center hasn’t had any cancellations, according to a Miami Beach spokeswoman. Many hotels are also enforcing their contracts with group business that is already booked, Talbert said.

THE GREATER MIAMI CONVENTION & VISITORS BUREAU SAID THE MAJOR FACTOR DRIVING DOWN NUMBERS ON MIAMI BEACH IS AN INCREASE IN HOTEL SUPPLY, NOT ZIKA.

At The Betsy hotel on Ocean Drive, managing director Jeff Lehman said the hotel was sold out Thursday night and revenue and occupancy were above 2015 rates. And the 112-room Avalon hotel on Ocean Drive said its loyal clientele hasn’t tapered off because of Zika.

“I don’t see everyone walking around saying, ‘Oh my gosh, what are we going to do?’” said Jolie Warshaw, the hotel’s director of sales.

In August, the city of Miami Beach collected nearly 7 percent more in resort taxes over the same time last year, indicating that Zika hasn’t yet infected the city’s tax revenues. But Zika only started affecting Miami Beach in late August.

At the commission meeting last week, Mayor Levine said he expects Zika to hit resort taxes.

I DON’T SEE EVERYONE WALKING AROUND SAYING, ‘OH MY GOSH, WHAT ARE WE GOING TO DO?’Jolie Warshaw, the Avalon hotel’s director of sales

And while some hotels have remained unaffected, the story changes dramatically depending whom you ask.

A sales manager at a Sunny Isles Beach hotel, who asked to remain anonymous because her boss wouldn’t want her to say business is down, said she has seen a “major decline” in bookings due to Zika.

“The longer the CDC has travel warnings and the further they spread, the worse it is going to be,” she said. “If it spreads up to North Miami Beach, Bal Harbour and Sunny Isles, we will lose tens of thousands [of dollars] in groups sales booked for the November-January time frame.”

She has had to start adding an addendum clause in contracts for group business that says the hotel will consider a CDC travel warning for Sunny Isles as force majeure and refund deposits in full. The possibility of Zika spreading to Sunny Isles has already resulted in lost business, she said.

More than a dozen hotels in Miami Beach rejected the Miami Herald’s requests for comment on this story. When asked to get more details about whether area hotels are losing business because of Zika, Wendy Kallergis, president of the Greater Miami & the Beaches Hotel Association, said she was not able to provide the Herald with any information on the topic.

Said Kallergis in an email: “[The hotels] are busy taking care of our guests and booking business.”

#Miami #Beach  #Zika

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