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Morgans Hotel Group is having a doozy of a time with its Miami hotels, capped by a huge RevPAR drop at Delano South Beach. Morgans reported to the SEC that RevPAR declined by 9.7% during Q1 compared to the same period last year. On top of that, Morgans saw RevPAR drop 16% this past quarter in its three Miami hotels: the 194-room Delano South Beach, the 220-room Mondiran South Beach and the 308-room Shore Club (below).
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Morgans execs blamed the drop on a strong US dollar, as well as competition of new hotel supply in both Miami and New York. Food and beverage revenues also took a hit, sinking by 5.3% to $20M company-wide. “The revenue decline at Delano South Beach was primarily due to increased competition in Miami, which negatively impacted the Delano South Beach's nightclub, restaurants and bars,” Morgans execs stated in docs. News of Morgans' nearly $9M loss in the quarter comes as the company announced plans to merge with global lifestyle hospitality company SBE, which plans to acquire Morgans' outstanding shares and 13 hotels for $794M.
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