IOn February 9, 2022, at the request of Commissioner Kristen Rosen Gonzalez, the Mayor and City Commission approved Resolution No. 2022-32032, directing the Administration to conduct a hotel room market study. The Commission discussed engaging a consultant to obtain a greater understanding of the current and projected state of the City’s hotel rooms and short-term rental market to regulate the tourism industry without compromising residential qualify of life and preservation of the environment.

As part of the study, the Administration was asked to identify: 1) the total number of existing hotel rooms in Miami Beach; 2) existing short-term rental units for transient rentals in the Miami Beach; 3) hotel development projects currently under construction in Miami Beach; and 4) hotel development projects for which land use applications have been submitted for City of Miami Beach Planning Department review.

The Administration issued a Request for Letters of Interest (RFLI) to the City of Miami Beach pre-qualified pool of four (4) economic development consultants requesting advisory services for a hotel and short-term rental market study. The RFLI submissions were due on March 18, 2022. On March 18, 2022, the Administration received no responses to the RFLI. After an inquiry, it was determined that the pool of consultants preferred to have access to existing/secondary Miami Beach data for analysis, versus sourcing/producing the primary data (as directed in the RFLI) and then providing an analysis.

Accordingly, the Administration pivoted and collected available data to issue a new Invitation to Quote (ITQ) for a Miami Beach Hotel and Short-term Rental Market Study. The scope of services included access to internal and external data compiled and/or collected by the City to analyze the hotel and short-term rental market including, but not limited to, list of hotel and short-term rental Business Tax Receipts (BTRs), data provided by City departments that regulate development approvals and enforce BTRs (Planning/Police/Code Compliance), web services that monitor hotel and short-term rental development and utilization, including AirDNA, and data sourced by the Greater Miami Convention and Visitors Bureau (GMCVB)).

The quotes were due on August 5, 2022. The Administration received a single response from Daedalus Advisory Services (Daedalus), and thereafter engaged Daedalus to analyze the Miami Beach hotel and short-term rental market.

The study was submitted in June 2023 and shared with Mayor and City Commission via Letter to Commission (LTC) No. 335-2023.

The approach of the study included:

1) assessing economic and tourism trends – measuring the economic drivers that support additional tourism flows, which stimulate the growth in hotel rooms and short-term rentals in the Miami Beach market;

2) assessing comparable cities – Nashville, San Diego, Tampa, New Orleans, and Ft. Lauderdale;

3) developing a comparison of hotel rooms and short-term rental capacity amongst the comparable cities (data drawn from Census, Bureau of Labor Statistic, Bureau of Economic Analysis, CoStar and AirDNA); and

4) evaluating current Miami Beach tourism market conditions and assess possible policy responses for hospitality industry.

The study considers Miami Beach’s economic structure, changes in population, and the likely outcomes from limiting or expanding hotel development. It assessed national, state and local economic trends to understand if tourism drivers are likely to continue (e.g., post pandemic changes to tourism supply and demand and available talent and wages in the hospitality sector).

The study conclusions are summarized below:

• The Miami Beach economy remains resilient to shocks – the labor market is recovering by nearly every major measure, and the employment rate for working age adults is at a 20-year high. While consumers remain uneasy about inflation, domestic and international travel is expected to stay strong.

• New hotel room demand is often spurred by increasing travel access through a number of channels, including discount carriers and social media. Hotels are anchors for Miami Beach visitors/tourists who seek to experience our destination amenities and culture. Hotels are a fundamental tourism asset. In Miami-Dade County, for example, visitation remains strong year-to-date, with nearly a 0.9M increase in total visitors as compared to 2022.

• Occupancy and Revenue Per Available Hotel Room (RevPAR) signal demand and supply trends. Currently these indicators show that the Miami Beach hotel supply may be constrained. Miami Beach continues to be number two after Surfside/Bar Harbor.

• Gross room capacity additions illustrate that Miami Beach is still near the average of national hotel room additions against comparable cities, indicating that the Miami Beach hotel pipeline is in-line with national trends.

• As the Miami Beach hotel pipeline continues to grow, Miami Beach must look at the economic benefits (direct, indirect and induced) that arrive with hotel construction and operation.

• Hotels must be partners with Miami Beach, as in other cities, and must participate in the drive to reduce any negative community impact of more hotel rooms, by exploring more sustainability and mobility solutions as an example.

To view the full Hotel and Short-Term Rental Market Study, please go to: https://www.miamibeachfl.gov/wp-content/uploads/2023/07/Miami-Beach-Econ-Tourism-Oveview-v22.pdf.