Hotel & Motel Management / September 21, 1998
By Larry Luxner
MIAMI -- The presidents and prime ministers of 34 Western Hemisphere nations -- ranging from the mighty United States down to tiny St. Kitts-Nevis (population 42,000) have formally agreed to create a Free Trade Area of the Americas (FTAA) by the year 2005.
That's good news for the region's economy as a whole. And the leaders' decision to hold launch FTAA negotiations in Miami gives a big boost for downtown hoteliers.
"This is absolutely great for us. It's good business and very good publicity," says Chuck Martinez, associate vice-president of sales for the Greater Miami Convention & Visitors Bureau. "These individuals are going to have about 50 meetings over a three-year period. Obviously, they're going to spend money on hotels, restaurants and phone calls. There could be spinoff effects as well."
Under a political compromise reached three months ago by the 34 nations involved, Miami will host all negotiations from now to mid-2001; Panama City will then take over for a two-and-a-half-year period ending in 2003, with final talks wrapping up in Mexico City through 2004 and 2005. Nine committees have already been formed, covering everything from market access to customs harmonization. Each will be meeting five or six times, though such details will be formalized in a few months, when an executive director is hired to run a newly established FTAA office in Miami.
John Visconti, marketing manager at the Hotel Inter-Continental Miami, says "a lot of people will come here for those negotiations. It's not going to be Coconut Grove or Miami Beach, it'll be downtown."
Visconti says his 639-room hotel, which has 500 employees and average room rates of $195 to $300, is ideally situated to take advantage of the Latin connection.
"Fifty percent of our business is non-U.S., of which 80% comes from Latin America -- mainly Brazil, Venezuela and Colombia," he said. "I get more of the Latin business than the other hotels. We simply have more hotels in Latin America, so the Inter-Continental brand enjoys more name recognition."
Visconti, who puts the economic impact of the FTAA negotiations "is in the millions of dollars," has 10 salespeople working full-time to drum up convention business.
Other downtown hotels will likely benefit as well, including the Hyatt Regency Miami, the Biscayne Bay Marriott and the Wyndham, which is in the midst of a $15 million renovation.
Stuart Blumberg, president of the Greater Miami & the Beaches Hotel Association, says the decision to launch FTAA negotiations in Miami "sends a very clear message that in addition to tourism, "Miami is also a great destination for the world's leaders to do business."
Blumberg says his association's 340 members represent 30,000 hotel rooms, 72,000 employees and economic impact of $3.1 billion. "Anything like that has an impact on us," he said. "It gives us another level of stature in the world's eyes."
Meanwhile, the supply of hotel rooms in Dade County -- currently estimated at 55,000 -- keeps on growing. In early June, workers broke ground on a $100 million J.W. Marriott along Brickell Avenue, while a 300-room Mandarin Oriental is planned for nearby Brickell Key. Two Ritz-Carlton hotels are being built -- one on Coconut Grove and the other in Miami Beach, while an 800-room Loew's is under construction at 16th Street and Collins Avenue. The $165 million property, the first new hotel in Miami Beach in many years, will open in October.
But the most impressive project of all may never get off the ground. Known as the Millenium, it consists of twin 70-story towers containing a hotel (possibly a Four Seasons) and office complex, along with condominiums and retail shops. The Brazilian investors behind the project are prepared to invest hundreds of millions in the project, though Blumberg says "there has been some opposition to it, because from a design standpoint the buildings will block out views of Biscayne Bay from anybody behind them."