It comes as no surprise that Miami's hotel market could be saturated by the end of 2016. Over the past 2 years and through the first half of 2016, occupancy rates and revenues have began to stagnate in Miami and Miami Beach. In 2015 over 44 million travelers moved through Miami International Airport and average daily rates rose all over Miami. As we continue through 2016, a large influx of new hotels and a leveling out market have kept occupancy rates flat around 78% and average daily rate at $153. These numbers are still well up from 2014 and before. Global uncertainty amongst local and foreign economies, currency value, oil prices, less purchasing power for foreign travelers, terrorism, etc. have put a slight slow-down in the Miami hospitality industry.
A lot of the hotel investment in Miami has come from REITs looking to capitalize on the Miami hospitality industry, an example of the Miami Beach EDITION which sold to the Abu Dhabi Investment Authority for $230 million. Ultra Music Festival and Art Basel continue to drive demand for travel to Miami, which will be needed to fill the thousands of rooms for new hotels such as EDITION, Faena Hotel, Nautilus, Aloft, 1 Hotel South Beach, W Miami, Me Miami, Four Seasons Surf Club, etc. 1 Hotel South Beach has even infamously been shopped around off market for $426 million, or $1 million per key. While the Miami hospitality market may not see much growth through the rest of 2016, the industry is well positioned for continued success as Miami continues to grow into a city of the future.