Industry Update
Press Release18 November 2020

Kalibri Labs Ahead of the Curve: Miami, FL

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  • Miami's occupancy levels have been generally stable and well above their 20-year average since 2015. The year-end 2019 level of 77.6% was significantly higher than the longer-term average of 73.1%. RevPAR decreased at an average annual rate of -2.5% since 2015, well below the Top 25 market average increase of 1.2% for the period. While occupancy levels pre-pandemic were attractive, strong supply increases and a volatile international travel environment hurt pricing power in recent years in Miami.
  • The forecast decline in the Miami hotel occupancy level from 2019 to year-end 2020 is -42.7%, meaningfully better than the Top 25 market average decline of -48.3%. The forecast decline in ADR for Miami this year is significantly less than that of the Top 25 market average (-12.3% vs. -26.4%). These Occupancy and ADR contraction levels are expected to result in a -49.8% decline in RevPAR for Miami in 2020 (vs. a -61.9% for the Top 25 market average. The Miami 2020 RevPAR contraction, while significant, compares favorably with forecasts across the 65 markets tracked closely by CBRE (In contrast, Boston RevPAR is forecast to decline by 76.8% in 2020 - worst in the nation).
  • The weak pricing environment that has persisted in Miami since 2015 (as noted above) will serve to prolong a recovery as Miami and the nation move towards a post-pandemic environment. While Miami is expected to return to 2019 RevPAR levels in late 2023/early 2024, the previous peak RevPAR level of $150.28 will not likely be achieved until the later years of this decade. RevPAR change from 2020 through 2024 is forecast to average +20.2% during this period (well-below the Top 25 market average of 28.4%).
  • The delayed recovery anticipated for the Miami market comes from the historical reality that inbound international and group-related travel has represented a significant percentage of total accommodated demand at a comparatively high Average Daily Rate. 2018 was a record year for demand from these two sources. A rebound in group, convention and international-related demand will be required to insure a return to pre-Covid-19 levels of performance. As the market also relies on demand associated with the cruise line industry, the return of this sector will be another important factor influencing the timing of a recovery in Miami lodging market.

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About Kalibri Labs

Kalibri Labs evaluates and predicts revenue performance using its proprietary algorithms to generate the Optimal Business Mix for individual hotels, revealing the most promising opportunities to pursue along with specific direction on how to find and convert them. The HummingbirdPXM revenue strategy and benchmarking platform also includes the industry's most robust profiles for travel agent and OTA production. The Kalibri Labs database, updated weekly, is comprised of ADR, room revenue, room nights and acquisition costs from over 8 billion guest stays from almost 35,000 hotels dating back more than 5 years to give an expansive view of the U.S. hotel industry. Real estate developers, brokers, lenders, consultants, and others involved in hotel transactions use Kalibri Labs data to improve underwriting with a more granular view of benchmarks and trendlines for individual hotels, and almost 1000 markets and sub-markets for the U.S. These tools are enhanced with COVID-19 analysis to assist in modeling the future recovery curves.

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