Park reopens Royal Palm South Beach after a $100M-plus redo

Park Hotels & Resorts has finished a renovation of more than $100 million at the Royal Palm South Beach Miami, the 404-key Tribute Portfolio resort on Collins Avenue in the Art Deco district, and reopened it. The REIT expects the work to nearly double the hotel’s EBITDA once it stabilizes.

Why it matters

South Beach barely permits new hotel keys, and the ones that do get entitled arrive at a basis that almost nobody can make work. That leaves recapitalizing existing product as the main way institutional capital adds quality to the market, and Park has now put a public number on what that return looks like.

The claim to test is the EBITDA one. Park says it has invested more than $430 million in return-driven projects across its core portfolio since 2018, targeting yields above 15 to 20 percent at stabilization. If Royal Palm lands anywhere near that on a spend north of $100 million, it sets a benchmark that every owner of an aging Collins Avenue box will be measured against by their own lender.

For construction and design firms, the scope is the tell about where hotel capital is actually going: rooms, food and beverage, and meeting space, rather than adding keys. Only 11 of the 404 rooms are new.

The numbers

More than $100 million spent. 404 renovated guest rooms and suites across the East and West towers and the Lanai bungalow, including 11 new rooms. Four new food and beverage concepts. Meeting and event space modernized and expanded to roughly 20,000 square feet, plus a redesigned lobby and arrival sequence and upgraded pool and beachfront.

“Royal Palm is another compelling example of how we are unlocking embedded value while enhancing the quality and long-term earnings growth of our portfolio,” chairman and chief executive Thomas J. Baltimore Jr. said, per Hotel Dive.

What’s next

Park has not disclosed how long the hotel was out of service or named the design team. The number to watch is whether the promised EBITDA lift shows up in Park’s Miami Beach segment reporting over the next four quarters. More South Florida coverage.