South Florida hotel developers are heading north, drawn to Orlando by a booming tourism industry along with cheaper and more readily available land.
“Central Florida has been growing like crazy over the past few years,” said John Wijtenburg, a South Florida-based hotel analyst who serves as Vice President of the Colliers Hotels group. “There is a desire to take hold of that. It’s a bit more economically sound to build something in Central Florida and Orlando [than in South Florida].’’
Among the dozens of hotel projects recently started or expected to begin soon, several have originated from South Florida developers who say Orlando has become a must-have location for their portfolio.
Exactly how many developers have set their sights here is unclear, as specific projects are not tracked. Even so, it’s clear the region will soon see the debut of several hotels launched by South Florida companies.
Fort Lauderdale-based BTI Partners closed on its first Orlando property in 2014, a 600-acre piece of land just west of Walt Disney World’s Animal Kingdom.
On that property, so far it has completed two of The Grove Resort & Water Park’s three planned towers, which are home to nearly 900 condos that are rented out as hotel rooms.
The Grove Resort is illustrative of a trend of South Florida developers coming to Central Florida. (Ricardo Ramirez Buxeda / Orlando Sentinel)
The development of a new La Quinta Del Sol on International Drive, meanwhile, has been led by Miramar-based RivieraPoint Invest + Develop.
The $39 million project, expected to open in the second quarter of this year, sits across the street from another RivieraPoint project, the 53,647-square-foot Tryp by Wyndham hotel, which should open next year.
In addition, Kolter Hospitality of West Palm Beach plans to open its first property in Central Florida: a 180-room Marriott hotel in downtown Orlando in the second quarter of next year.
Companies from South Florida looking here is only natural, if not a new trend, CBRE hotel industry analyst Paul Wiemer said.
“When you have a New York developer come to Miami, everything seems so cheap,” he said. “When you have Miami developers say, ‘We have to start looking afield,’ I guess it would be a natural progression of, why not look up in Orlando?”
Weimer said the hotel industry, in general, is going through a growth spurt. Orlando’s available land and a building boom have benefited Central Florida and have offset previous fears of overbuilding, he said.
The Springs Resort Pools at the Grove Resort & Spa on Wednesday, Jan. 16. (Ricardo Ramirez Buxeda / Orlando Sentinel)
“Unlike Miami Beach, it’s all land everywhere [in Orlando], and it’s not that expensive,” Weimer said. “Most people now see that the more they build, the more people will come. They are over that fear.”
That has led to more undeveloped land becoming huge hotel resort properties like The Grove Resort & Spa.
BTI Partners Chief Operating Officer Kevin Mays said the project was an easy sell to investors.
“When you tell people that there is an opportunity to invest in Orlando, it’s pretty alluring,” he said. “Obviously, 72 million visitors come to town so there are a lot of people who might need this type of property.”
The continued growth in that number has been served by a growing number of hotel rooms, with data and analytics specialist STR reporting that Central Florida was home to 128,187 hotel rooms in December, just six shy of the record set in November.
“I don’t believe the supply will ever surpass demand,” said RivieraPoint Finance and Asset manager Carlos Chuman, who has helped broker more than 400 property transactions in his 15-year career. “There are a lot of hotels going up [in Orlando] and even that is not enough.”
That all the major theme parks are expanding is driving demand for more hotel rooms.
“There will be a need to accommodate for all of these new attractions,” Chuman said. “That’s very appealing to hotel developers.”