The Rise in Luxury Hotel Prices in Miami

While Miami has long been a hotspot for well-off vacationers, the latest numbers suggest that the city’s hotel prices have jumped above the national average.

The Miami-Dade area might have reported chillier temperatures than usual in the past month, but unlike the weather, its hotel market remains one of the country’s hottest. According to the latest reports, revenues from Miami hotel rooms have been growing, even as prices per room have remained stable. These numbers for Florida’s most popular vacation destination are on par with trends in recent years, during which hotel prices rose 56% from 2019 to 2022, costing hundreds of dollars more than usual to vacationers.

Explaining the latest numbers

On the one hand, it may seem like the Miami-Dade area may be experiencing a slump, with reports of fewer visitors, lower hotel occupancy, and lower per-room prices. But a closer look at the numbers reported by the Greater Miami Convention & Visitors Bureau shows that things are not too shabby in the Sunshine State. According to bureau statistics released in March 2024, Miami-Dade is still number two in the entire United States for occupancy rates and revenue per available room, and third for room rates. Compared to January 2023, occupancy and revenue in early 2024 have grown by 3.9% even as the average price per room remained the same.

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Why the initial price surge?

Miami has long been a popular destination for national and foreign travelers alike. The city, with its thriving nightlife, vibrant culture, world-renowned events like Art Basel, and extensive restaurant scene, has so much more to offer than its already appealing sun-soaked oceanside. When the last pandemic restrictions lifted and people eagerly returned to travel, Miami’s enduring popularity resulted in higher demand than rooms were readily available in the luxury hotel market, with the city welcoming 26.5 million visitors in 2022 according to the Greater Miami Convention & Visitors Bureau. Further exacerbating the imbalance was the fact that during the pandemic, hotels had significantly slowed operations, reduced capacity, and cut staff.

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But the disparity between supply and demand for rooms isn’t the only reason for the price spike. While the pandemic disrupted supply chains, leading to shortages and increased costs for materials and labor, it also served as a catalyst for major population relocation to Florida. Financial Times reported that in the 12 months after July 1, 2020, 220,890 Americans moved to Florida — more than to any other state. Florida was long a low-tax, business-friendly haven, but the state’s incredibly lax COVID regulations sealed the deal for many individuals who left their own home states to pursue permanent tropical weather and limitation-free living. And the trend didn’t just affect everyday citizens. Billionaires like Carl Icahn, who moved his hedge fund from New York to Miami, brought their business to the state. This movement contributed to an increase in housing prices and the overall cost of living.

Future Outlook

While pandemic restrictions might be a thing of the past, the mass migration to Florida of Americans is still ongoing. In fact, in 2023 Florida was the second-most “moved-to” state in America.

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In late 2023, several five-star hotels signed deals to break ground on Miami’s world-famous shoreline, signaling that developers expect anything but a slowdown in future occupancy rates and numbers at luxury hotels in Miami. In addition, the Robb Report included two of these upcoming luxury additions in its elite list of the most anticipated five-star hotel openings, an honor that is sure to spark increased travel to Miami by connoisseurs of luxury hotels.

Conclusion

Miami’s luxury hotel market is undergoing a remarkable transformation fueled by rising demand and significant investment in upgrades and renovations. While the future trajectory of prices remains uncertain, Miami’s resilience and ongoing appeal to high-net-worth individuals suggest that its luxury hotel market will continue to reach new heights in the years to come.

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