Editor’s note: This article is the second in a series focusing on South Florida’s transformation from a highly seasonal destination catering primarily to American tourists to a resort destination catering to an increasingly diverse clientele. The first article focused on Miami.
This article takes us approximately 30 miles north along Florida’s East Coast from Miami to Fort Lauderdale, Florida, which, like Miami, has been witness to dramatic changes in the complexion of its tourism industry in recent years.
While Miami went through multiple and often headline-grabbing transformations during the 1950s, 60s and 70s before being reborn in the 80s with the advent of South Beach and the development boom that followed, Fort Lauderdale’s persona as a resort destination underwent changes of a much more subtle nature, at least until relatively recently.
Following its role as a major Naval air station during World War II, Fort Lauderdale and, in particular, the Fort Lauderdale Beach area, developed as a home to relatively modest low-rise, non-branded motels during the 1950s. The 1960 film “Where the Boys Are” brought fame and notoriety to Fort Lauderdale Beach. For approximately 25 years following the film, Fort Lauderdale was the epicenter of college Spring Break vacation activity in the United States. The resort’s image was one of rowdy, heavy-drinking beach parties and motel rooms filled far beyond capacity with floor-sleeping, often inebriated students. Beginning in the mid- to late-1980s, it seemed to many that things were getting out of hand and major business leaders began working hard to change the image of the area.
Change did not occur overnight, but during the 1990s, Spring Break drinking and revelry was gradually replaced by activities of interest to families and more mature travelers. In addition to an increasing number of international travelers as well as more well-heeled Americans, Fort Lauderdale became witness to a large and growing boom in visitation by gay and lesbian travelers. The more diverse base of business and its relative affluence compared with the prior tourist base attracted the attention of major luxury chains and developers, and by the early 2000s a wave of luxury hotel development began to occur along the beachfront.
Where low-rise motels dominated the skyline just 20 years ago, a traveler now has a choice of high-rise luxury options. Joining the original lineup of branded, full-service hotels—which included Marriott Harbor Beach, Hyatt Pier 66 and the Sheraton Fort Lauderdale (actually two Sheraton hotels: Yankee Clipper and Yankee Trader)—new hotels opened. These include: the Atlantic Resort & Spa, the first of the “new wave” which opened in 2004; Ritz-Carlton; W Fort Lauderdale; Westin; B Ocean; Pelican Grande; Sonesta; and Hilton Fort Lauderdale Beach, just to name a few.
And now that the Great Recession is behind us, yet another wave of construction is taking place with both a Conrad and a Four Seasons in the development pipeline.
As one might expect, the influx of high-profile luxury brands to Fort Lauderdale beach, combined with the cache attached to the high quality of the new hotel products, has had a positive impact on the market.
Hotel occupancy in Fort Lauderdale/Beach tract, as reported by HNN parent company STR, for the traditional “high season” in the first quarter of the year has trended significantly upward since the effects of the 2009 Great Recession waned, as shown in the chart below:
But this impact has not been felt only during the high season. The chart below shows occupancy during the third quarter of the year:
Since the depths of the Great Recession in 2009—when third-quarter occupancy was 53%—performance has improved with 2014 occupancy at 72% being 11 points higher than the 20-year average and 19 points higher than the 2009 low point.
Comparing the relationship between the first quarter (high season) and third quarter (low season) performance provides additional perspective.
The table below compares third-quarter (off-season) occupancy performance with first-quarter (high-season) performance over the 20 years.
The horizontal lines indicate the indexed performance—third-quarter occupancy level, expressed as a percent of first-quarter occupancy level—averaged in five-year increments from 1995 to 2014. As shown in the graph, occupancy during the third quarter was at 82% of the first-quarter level in 2013, the highest achieved in the 20-year period studied. For the most recent five years ending in 2014, occupancy for the third quarter averaged 79.6% of the first quarter level, significantly higher than the index for five-year incremental periods earlier in the study period.
In a similar fashion to that which was observed in the earlier segment of this series discussing the Miami Beach market, this improvement in “off-season” performance does not appear to have been achieved via substantial rate cuts.
As shown below, when the effect of inflation is wrung out of the figures by adjusting the reported average daily rate using the Consumer Price Index as reported by the Bureau of Labor Statistics for the “South Region,” which includes Fort Lauderdale, there has been real rate growth (in excess of inflation) of approximately 1.5% annually over 20 years studied.
Considering that the years studied include both the downturn after the 2001 terrorist attacks AND the multi-year impact of the Great Recession, this is noteworthy. And, of course, it is reflective of the increase in rates achieved as higher-end products entered the market.
Clientele
Perhaps even more important than the gradual leveling of seasonality, the transformation of the clientele attracted to the area is apparent to anyone returning to the area after a long absence.
While the Elbo Room still bursts at the seams with happy, partying beach-goers as it did in “Where the Boys Are” more than 50 years ago, the clientele is substantially changed. As with a visit to most of South Florida’s clubs and restaurants, a patron is likely to hear a cacophony of different languages. And overhearing someone make a congratulatory toast to a same-sex couple celebrating their wedding union would likely result in more raised glasses and good wishes by the other patrons than raised eyebrows as would likely have been the case just a few years ago.
So what has resulted in this “new Fort Lauderdale” coming of age?
Few would argue that, more than any other factor, the hard work and dedication of tourism officials and the hotel/business community itself over more than two decades has made its mark. While some mourn the loss of the mom-and-pop motel days of the Spring Break era, most visitors seem to be unaware that Fort Lauderdale Beach was ever any different than it is right now. Should they really need to know, they can still watch that 1960 movie and hear Connie Francis singing the movie’s theme song as the camera pans north along a Fort Lauderdale Beach that bears little resemblance to its current appearance. That Fort Lauderdale Beach now exists only on film and in the memories of a diminishing group who were here to experience it.
And, even for many of them, the change is at the same time startling and most welcome.
Gregory T. Bohan, ISHC, BS Cornell University, MS Florida International University is a member of the full time faculty at Florida Atlantic University’s College of Business, instructing in the rapidly growing Hospitality and Tourism Management Program. Prior to FAU, Mr. Bohan taught at the Chaplin School of Hospitality at Florida International University. His professional career includes more than 35 years of hospitality consulting – primarily in the areas of financial structuring and market feasibility. Before embarking on his current, full-time teaching career, Mr. Bohan was Managing Director of Pinnacle Advisory Group’s Florida/Caribbean practice. Earlier in his career he was a co-Principal in charge of the consulting practice at PKF’s New York office as well as developer/owner/operator of full-service country inn in Vermont. He is on the Executive Committee of the Board for the Hotel Sales & Marketing Association’s South Florida chapter and active in other industry affairs. He can be reached at Florida Atlantic University via email: bohang@fau.edu.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that might be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.