Miami Beach; the home of America's biggest art fair
Founded in 1970 in Basel, Switzerland, Art Basel is the world’s premier and largest modern contemporary art fair. In 2002, Miami Beach was selected as its first international outpost, successfully drawing 160 galleries and 30,000 attendees. Throughout the years, this weeklong event taking place every December quickly became the biggest art fair in the United States. Today, Art Basel draws an estimated 80,000 people to Miami, making it one of the major stops of every art dealer around the world.
Art Basel’s impact is second only to Christmas
The impact of Art Basel on Miami’s hospitality industry is second only to the Christmas Holiday season. Demand for rooms during Art Basel week resulted in measurable rate increases, which at maximum spiked north of $296 across the Miami area, up by 79% when compared to the prior week.
Data recently released by STR for the 2017 Art Basel week show Miami’s hotels with significant performance gains, with average Revenue per Available Room (RevPar) for the five-day duration of the Art Basel up 15% year-over-year. Average occupancy was also 7% higher during the same week, signaling that more people are coming to Miami to attend Art Basel.
Miami Beach Hotel GMs agree, F&B was the biggest winner
Hotels in Miami Beach, where RevPAR in 2016 was 27% above those for the entire Miami Area, did experience similar increases, taking their maximum daily Average Daily Rate [ADR] close to the $550 mark during the Art Basel Week peak. ADR for Miami Beach has averaged roughly $250 for 2017 and was highest in Q1 where it reached $298.50.
Consensus among major Miami Beach Hotel General Managers [GM] indicates their properties experienced a much stronger Art Basel impact this year. The big winner was Food & Beverage [F&B] revenue, which had stronger year-over-year gains than ADR.
While Christmas is a bigger event in the Miami Beach calendar, Art Basel brings higher ultra high net worth individual and corporate sponsorship food & beverage spending due to the nature of the event. General managers indicated that while some of their properties experienced single digit ADR improvements, overall gains were well into the double digits due to increased food & beverage spending. GMs also concurred that the 2017 season is stronger compared to the prior year.
Art Basel 2017 drives a much stronger High Season
Along with Miami Beach GM testimonials, the more robust 2017 numbers indicate that, despite fears of negative repercussions from Hurricane Irma from earlier this year, the season is starting strong. A rising stock market, increased economic confidence, and the end of the 2016 Zika scare are all factors that have likely contributed to the healthier performance of Miami’s hotel market during Art Basel this year.
Passenger arrivals at Miami International Airport to October of this year also corroborate the evidence that the start of the 2017 Season is turning out to be better than 2016. Year-over-year passenger counts are up 4.7% for international passengers and 8.3% for domestic passengers.
Art Basel itself has also become more popular every year since its inception, and more attendees coming to Miami to participate can explain some of the positive headwinds. This year, Art Basel was moved a week back as compared to last year to space it out more evenly between Thanksgiving and Christmas, likely boosting attendance.
The City of Miami Beach has estimated that Art Basel generates a $500 million economic benefit to South Florida’s economy, and in October 2017, Art Basel signed an agreement with Miami Beach to keep the event in town for an additional five years - through 2022. Consequently, the home of Art Basel, Miami Beach’s Convention Center, is currently undergoing a $615 million renovation that will be completed by 2019, ensuring the Art Basel will continue to have a premier facility in which to host the event. For local hotel owners, this driver provides a measure of certainty about future demand; one that has demonstrated the potential for further growth.