GlobeSt.com SPECIAL: Uncertainty Shrouds Beach Hotel Industry

MIAMI BEACH, FL-The $14 million the owners of the Betsy Ross Hotel are asking on the colonial-style property at 1440 Ocean Drive tells a lot about the rapid price appreciation that has taken hold over the past couple of years in city’s trendy South Beach community.

At about $162,790 per unit, the new sales listing on the 86-room hotel pales in comparison to the $272,727 per unit, or $6 million, that is being asked for the 22-unit Casa Grande hotel at 834 Ocean Drive; or even the $433,333, or $6.5 million, being asked for the 15-unit Mare Grande hotel at 524 Ocean Drive.

There’s no question asking prices are increasing appreciably, Miami-based hotel consultant Sheldon Greene tells GlobeSt.com. The relevant question is how long the owners can maintain their asking prices in light of the dramatic drop in air travel following the Sept. 11 national tragedy and increasing fears over a pending economic recession. It is all coming at the worst possible time, he says, just months before the start of the tourism season.