The Sunshine Economy: The Hotel Industry In South Florida

Feb 22, 2015

The Marseilles Hotel on South Beach is undergoing a $10 million renovation. Owner Lloyd Mandell is a second generation Miami Beach hotelier.
Credit Tom Hudson

A LITTLE HISTORY

Ian Schrager and Lloyd Mandell used to be neighbors. 

One is an iconoclast who made a fortune (and went to prison for tax evasion) as co-founder of the famed Studio 54 nightclub in New York, and the other a Miami Beach native whose dad owned a gas station where a Starbucks now stands on West Avenue.

The two men are in the same business now, technically. But they came to it in different ways.

Mandell bought his first hotel, the Marseilles on Collins Avenue between 17th and 18th streets, in 1978. He and his wife, Clara Mantilla, paid about $1 million for the beachfront property with 112 rooms.

It was days before voters were to decide the fate of a referendum on casino gambling in Broward and Miami-Dade counties. If the measure passed, conventional thinking was beachside property values would skyrocket with gaming operators snatching up locations for casinos. The vote failed. Mandell was happy and he set about running his new hotel.

Three years later, Ian Schrager would be released from federal prison after serving 13 months. He went on to found the Morgans Hotel Group and turn it into a premier boutique-hotel owner and operator through the 1980s and '90s with hotels in New York City.

In the early '90s, Schrager brought his concepts to Collins Avenue when he bought the Delano just a few doors down from the Marseilles Hotel. The Delano's chicness ushered in a new era of Miami Beach hotels that still reverberates today. Schrager eventually sold the Morgan Hotel Group (and the Delano along with it) and has gone on to start a new company owning, operating and branding hotels. Mandell still owns and operates the Marseilles, and now also the neighboring 127-room Dorchester Hotel.

  BETTING ON GROWTH

Hospitality is Florida's business and business is booming.

Almost 95 million tourists visited the state last year. More than 1 million people work directly in the hospitality industry. Room prices are rising, real estate values have recovered and reservations are mostly full. Optimism is fueling a building and renovation boom in hotels.  From Key West to the Palm Beaches, thousands of new hotel rooms will be inviting guests to come and stay over the next two years. Family-run operations and multi-national financiers are actively betting on South Florida’s magnetism to be irresistible.  

Lloyd Mandell bought the Marseilles Miami Beach Hotel in 1978 with his wife. His son Steven has joined the business becoming the third generation to be in the Miami Beach hotel industry.
Credit Tom Hudson

And so is Lloyd Mandell.

He's undertaken a $10 million renovation project that began simply enough.

"The original project was to change a few pieces of furniture in the lobby. Every day that went by, it became clear we had to increase the extent of the project because in the hospitality business you are judged by your weakest link," Mandell says.

The remodeling expanded to include new Brazilian hardwood fencing, a new pool deck, new cabanas, green space and outdoor food areas just off the beach boardwalk.

Mandell's son, Steven, remembers shuffleboard courts at the hotel growing up. The guests who used them are gone, replaced by visitors looking for more glamour. Lloyd admits the changes Schrager's Delano brought inspired others. He says: "Right now, with the huge amount of investment that has come into the area, in my case has motivated one to rise with the tide and hopefully exceed the tide."

The tide of hotel rooms is rising. More than 7,500 are planned for Miami-Dade County before the end of 2017, according to the Greater Miami Convention and Visitors Bureau.