Florida Hotels Outshine U.S. Averages with Robust Pricing Power and Revenue Growth

A forthcoming report from JLL Hotels & Hospitality reveals that Florida's premier hotel markets have been surpassing national averages in revenue growth. Even after adjusting for inflation, these markets have demonstrated remarkable gains in pricing power. These encouraging trends are fueling further hotel development across the Sunshine State, according to JLL.

Throughout 2022, the top 10 Florida lodging markets consistently outperformed the rest of the country, with revenue per available room (RevPAR) in each market exceeding the U.S. average. The Florida Keys emerged as a standout, boasting impressive occupancy rates and average daily rates.

Florida's Stellar First Quarter Performance

Florida's hospitality industry continued to shine in the early months of 2023. Here's a ranking of the top 10 Florida hotel markets, ordered by their average revenue per available room performance in the first quarter. Remarkably, all of these markets outpaced the U.S. national average:

• Florida Keys
• Palm Beach
• Miami
• Sarasota
• Fort Lauderdale
• Fort Myers
• Orlando
• Tampa
• Melbourne
• Jacksonville

Maintaining Pricing Power Despite Growing Supply

Hotel investors have noted that Florida has sustained its ability to fill hotel rooms and maintain robust pricing power, despite increases in supply. All but two of the Top 10 Florida lodging markets experienced significant supply growth from 2020 to 2023, yet all posted annualized revenue per available room growth that exceeded the U.S. average.

Miami, for instance, added hotels between 2014 and 2023, providing 5.16 million more room nights for the market to absorb. Yet, despite the added supply, the city saw an average annual increase in revenue per available room of 2.1%. This resilience has been largely driven by rising daily rates at popular resorts.

Booking patterns so far in 2023 suggest a "recalibration" in the market. Some previously high-demand destinations have lost some of their post-pandemic allure. However, this normalization in demand patterns still shows performance levels broadly higher than in 2019.

Embracing Full-Service Hotels

While the national hotel conversation revolves around the growth of midscale, premium economy, and extended-stay brands, Florida's most visited lodging markets have been embracing full-service offerings.

One out of every three hotels delivered since 2022 were full-service properties, and about 60% of projects under construction are full-service. This trend speaks to investor expectations that leisure and business travelers will prefer full-service hotels in these key Florida destinations.

Investors are paying premiums to participate in the market. Since the pandemic, the average price per guest-room key has increased, according to JLL's analysis of recent hotel transactions. Investors are attracted by the fact that between 2014 and 2023, nearly all top markets and submarkets in Florida posted annualized growth in revenue per available room.

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Source: Skift

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