Why the Tampa Bay hotel industry outpaces nation
By Frances McMorris
Tampa Bay Business Journal
Published: Jun 13, 2016

The Tampa Bay region's hotels are outpacing other markets in the rest of the country with growing demand for new hotel rooms, said a hotel analyst.

"There is unaccommodated demand in both counties so there is still room for growth, in particular in luxury and upper upscale properties like Hyatts, Westins and Omnis,” said Lou Plasencia of the Plasencia Group. Downtown St. Pete, he said, "has a huge void that could be filled by the construction of full-service group hotels. "

The Tampa-St. Pete-Clearwater area has for many years been considered one of the better valued hotel markets in the state, Plasencia said. "There are a lot of investors who really like the West Coast of Florida," he said, pointing to the beaches, Tampa International Airport, walkable communities, cultural outlets and sporting activities.

Pinellas County had a very strong leisure year in 2015, Plasencia pointed out. Earlier this year, the county's Clearwater Beach was named No. 1 on TripAdvisor's annual list of the 25 best beaches in the U.S. because of its two-and-a-half miles of powdery sand and calm, shallow water.

Hillsborough County has also been seeing strong hotel performance. Last month, Visit Tampa Bay, the official marketing arm of the county, reported that the county bed tax or tourist development tax hit nearly $14.2 million in the six months ended March 31, a 14 percent increase of over $12.4 million for the same period last year.

Hotel revenue in the county for the second quarter of fiscal year 2016 was more than $205.3 million, or 8.4 percent higher than the same period a year ago. The bulk of the revenue came from hotels in the Westshore area, which brought in $91.8 million on an occupancy rate of 84.7 percent.

So far this year, the hotel numbers have been up even though the first quarter was "a little soft because of where Easter and Passover fell,” Plasencia said. However, he added, "when you look at how we compared to other markets, we're probably 100 percent better than the rest of the country.”

In the Plasencia Group's second quarter forecast for Florida's hotel market, the state "fared better than the rest of the nation when it came to transactions on a price-per-key basis. Today, Florida lodging transactions are approaching an average of $290,000 per room, outpacing the U.S. average of about $190,000 per room and already ahead of the 2007 peak of roughly $270,000 per room.”

In the first quarter of this year, both Tampa and Orlando were in the top 10 in revenue per available room (RevPAR) performance. Tampa had $110.71 for RevPAR in the first quarter of 2016, or 6.2 percent higher than the previous year and 7.4 percent higher for average daily rate (ADR) at $138.01. Occupancy was down very slightly, the report noted.

"We're pretty bullish on Tampa Bay,” Plasencia said. Miami, long noted for its tourism dominance has been hit pretty hard because of so much new supply. New properties often have low introductory rates to attract new business. That, in turn, affects existing hotels which may have to cut their rates to compete. Plasencia said it may be two years before those rates can be absorbed by Miami properties.

In addition, the Tampa/St. Pete area isn't being affected by the encroachment of Airbnb - a website that connects tourists and business travelers to available rooms other than at traditional hotels - sometimes in people's homes or even garage apartments - onto the hotel industry's turf.

"As a whole the Tampa Bay area has significantly fewer units participating in this service than the Southeast Florida region,” he said.

There is also pent-up demand for group business. "There are a lot of corporations who want to have meetings in Florida but rooms in Miami and Ft. Lauderdale are priced so high that providing an alternative on West Coast would be huge,” Plasencia said.

Tampa was recently ranked as the 25th top destination for meetings and events in the United States by Cvent Inc. (NYSE: CVT), a cloud-based enterprise event management company. Cvent attributed the ranking to the Tampa Convention Center, Riverwalk, Tampa international Airport and attractions such as the Florida Aquarium, Busch Gardens and Lowry Park Zoo.

Last month, Visit Tampa Bay also reported that Hillsborough County was at 107 percent of its convention room nights goal.

Additionally, Beyonce's April 29 concert resulted in 97 percent occupancy compared with 75.3 percent a year ago - an increase of 27 percent. She also had a trickle effect on the next night - Saturday - with 94 percent occupancy from 74 percent the year before. Revenue from the night of her concert and the next night jumped 68 percent and 67 percent, respectively over the same nights in 2015.

Frances covers transportation and hospitality for the Tampa Bay Business Journal.

Hotel Openings

Hotel	City	Class	Open Date
Hyatt Place Lakewood Ranch	Bradenton	Upscale	Q1 2017
Bay Esplanade Hotel	Clearwater	Upper Midscale	Q1 2017
Entrada Clearwater Beach	Clearwater	Upper Midscale	Dec-16
Hampton Inn & Suites	Clearwater	Upper Midscale	Q2 2016
SpringHill Suite/Residence Inn	Clearwater	Upscale	Q2 2017
Wyndham Grand Resort	Clearwater	Upper Upscale	Q3 2017
Embassy Suites	Sarasota	Upper Upscale	Q2 2017
Hotel Sarasota, Curio	Sarasota	Upper Upscale	Q3 2017
Westin Sarasota	Sarasota	Upper Upscale	Q4 2016
Hampton Inn Airport	Tampa	Upper Midscale	Q3 2016
Hampton Inn Busch Gardens	Tampa	Upper Midscale	Q4 2016
Holiday Inn Express	Wesley Chapel	Upper Midscale	Q4 2016