Casinos want to boost Miami tourism, but does it need the help?
Amid a record year for Miami tourism, casino companies tout their resorts as a big boost for the vacation industry. Does it need the help?
Preslee Rakes, left, her mother Tina Rakes, center, and Brad Cunningham, right, all from Kansas, feed seagulls during a visit to the South Beach area of Miami Beach, Fla. Florida tourism bounced back better than expected in 2011. A year ago, after the oil spill and lingering economic woes, the outlook was bleak. But it wasn’t as bad as everyone thought, and more modest growth is expected in 2012. ALAN DIAZ / AP
BY DOUGLAS HANKS
Two of the world’s largest casino operators promise major boosts to tourism if they can open resorts in downtown Miami. But how much help does the vacation industry need?
Hotels, restaurants and other tourism businesses in Miami-Dade now employ more people than they did before the recession. Among the country’s top hotel markets, only Nashville and San Francisco saw a bigger boost in revenue from hotel rooms than in Miami-Dade, where the measure is up 14 percent this year.
Hotel taxes in Miami-Dade surged 29 percent in the latest report, despite a strong showing in 2010. In fact, taxes charged to hotel guests have more than erased losses in the recession and are back to record levels.
“We don’t need the help,” said Bruce Turkel, whose Coconut Grove advertising firm has represented the Greater Miami Convention and Visitors Bureau for nearly 20 years. “On the other hand, if [the introduction of casino resorts] is managed well, it could help us.”
His comments capture the complex equation under consideration as South Florida considers adding mega-casinos to its tourism arsenal. The vacation industry is enjoying some of its best days by many measures, yet the economy needs a significant boost to leave the recession behind. Casino resorts say they can build on Miami’s tourism appeal, particularly among conventioneers, but critics see mixed messages.
They point to Miami’s strong popularity with tourists and warn that expanded gambling could spoil the city’s image as a chic playground.
And they see the size of the proposed resorts — enough to double downtown’s current hotel inventory — as swamping an otherwise-healthy industry. With casinos able to rely on gambling profits instead of hotel revenue, some predict the resorts would bring down rates across the area.
“If you are in the gaming business and the rooms business, the gaming business wins and you give the rooms away,’’ said Michael Depatie, CEO of Kimpton Hotels, which runs the 411-room Epic hotel about 10 blocks from the proposed Sands site. “That is a threat to any hotel.”
With unemployment near record levels and South Florida down nearly 180,000 jobs since the housing bust, casinos can make a strong economic argument regardless of the status of tourism.
A bill under consideration by the Florida Legislature would allow casino resorts provided they cost $2 billion to develop — enough of a budget to create thousands of construction jobs in a region that has lost almost half of its building industry. Genting Group, the Malaysian company that has already bought $500 million worth of land along the Miami waterfront, promises to open up South Florida to the coveted Asian market through its popular casino resorts in Singapore and Malaysia.
Some experts also see lavish casino resorts as a way for Miami to stay competitive, as more destinations around the country and the globe pursue their own gambling projects.
Casino resorts are “probably the one element of the visitor experience that’s missing in Miami right now,” said Peter Yesawich, an Orlando-based tourism marketing veteran who is now vice chairman of MMGY Global.
Plans for Miami floated by Genting and the Las Vegas Sands Corp. would arguably deliver a top goal of the tourism industry: a modern convention center and adjoining headquarters hotel. This week, Miami Beach invited private developers to compete for a plan to build a hotel next to the city’s convention center as part of a major rehab of the facility, which tourism leaders have pursued since the late 1990s.
Walt Disney World is funding much of the opposition to the casino bill, with its advocates warning more gambling would tarnish Florida’s appeal as a family vacation spot. But supporters of the casino industry say Miami’s potential as a convention powerhouse could be the main motivator.
“You add gaming in with everything else, you’ve got the No. 1 convention destination,’’ said Glenn Schaeffer, a former Mandalay Bay president in Vegas who briefly worked for the Fontainebleau Miami Beach. “Orlando would have to up its game.”
Broward’s tourism industry hasn’t rebounded as strongly as in Miami-Dade, where a steady stream of foreign tourists bolstered bookings throughout the downturn. Casino companies are also shopping potential Broward sites, though industry insiders say Miami is the No. 1 choice for a casino resort given its global appeal.
Genting estimates its 5,200-room Resorts World Miami would employ 19,000 people. That would make it Miami-Dade’s largest private employer. Under current conditions, that many jobs would shrink the county’s unemployment rate from 10.2 percent to 8.8 percent.
With 30 acres and six towers modeled after a coral reef, Resorts World Miami would be grand enough to become a destination unto itself, Genting contends. Executives pointed to a similar Genting resort in Singapore, saying it helped boost tourism in the country by 40 percent. A top target would be Latin American gamblers who switch planes in Miami on their way to Vegas.
Genting’s plan calls for a sprawling 200,000-square-foot meeting space on an upper floor of its resort. Sands said it would create an exhibit hall with as much as one million square feet of space. — about twice the size of the Miami Beach expo. Sands, which runs one of the top convention centers in Vegas, claims it can bring the kind of large-scale meetings and trade shows that have mostly eluded Miami Beach and its 1957 convention center.
“There are lot of cities that are a lot less appealing than Miami that do better with conventions and trade shows,’’ said Andy Abboud, vice president of government relations for Sands. With fewer than 2,000 rooms, a Sands downtown resort would not be large enough to accommodate the thousands of attendees for major shows, so local hotels will benefit, he said. “We don’t want to build it all.’’
A downtown convention center may be successful enough to leave Miami Beach wondering if it needs one too. A Sands facility large enough to house the Miami International Boat Show and other massive events, would be a significant threat, said Stuart Blumberg, a co-chair of an advisory panel for the Miami Beach Convention Center. “The Sands model would really build up the downtown hoteliers,’’ he said. “It puts the Beach [center] out of business.”