Miami Beach – Convention Center Confusion

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Miami Beach’s plans to redevelop the convention center is sticking on whether it needs a headquarters hotel.  There are disagreements on whether a hotel would solve the convention center’s problems.  Discussions are underway to either scrap a convention center district redevelopment plan for a smaller-scale project, or identify other sites for a convention center hotel.

Industry leaders insist that it’s not enough to just give the center a facelift. It also needs a large, nearby hotel in order to remain competitive. “I think if we’re going to spend the money to have a competitive convention center and don’t do a hotel component, we’re making a mistake,” Commissioner Ed Tobin said at a city meeting,

The issue of a headquarters hotel for the convention center has dogged Miami Beach for more than two decades.  Problems began when deals were struck with the Loews hotel in the late 1990s, but meeting planners soon found the four-star resort too pricey for the kind of wholesale rates many groups demand for large gathering. At more than a half a mile away, the Loews, and the adjoining Royal Palm — also launched with city support — are also too far from the convention center for some meeting planners to consider them convenient.

When it comes to conventions, Miami Beach faces the relatively high prices of ocean-front, resort hotel properties which become a drawback for meeting and convention planners.  Miami Beach commands the 10th highest room rates in the nation, according to 2013 surveys.  Industry insiders state that there “isn’t a convention planner who isn’t sensitive to price”.

According to the CSL report: “It is highly unlikely that a private developer could generate the necessary return on investment to justify financing a headquarter hotel project. In reality, this is the situation that exists in nearly all markets in North America.”

In the meantime, a developer plans a 1,800-room hotel in downtown Miami, along with a 500,000-square-foot convention center. While smaller than the proposed Miami Beach project of about 1.3 million square feet,  would make the downtown a more attractive option for smaller groups looking to gather in the winter sunshine.

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