Downtown Hotels to Heat Up
While the Atlanta hotel market’s recovery had lagged behind the nation, it’s coming back full force. Thank growing business and group travel (for which Atlanta is heavily dependent) and employment and the economy picking up in both the city and region, PKF Hospitality Research prez Mark Woodworth told us yesterday. STR shows RevPAR was up 13.3% in Q1, almost double the national average, and combined with significant jumps in occupancy, room rates ticked up 4.5%. “That’s a strong, terrific quarter for Atlanta,” he says. Above, he's with his family: son Sam, wife Mary Kay, son Harry and daughter-in-law Annie (on their wedding day), daughter Savannah, and daughter-in-law Katie and son Will. (Which reminds us: weddings can also help the hotel industry.)
Hotel performance in Atlanta for Q1 '14 was strongest in the outlying suburbs, but look for big gains in the Downtown submarket. These will come from activity at the Georgia World Congress Center (above, which is hosting the WasteExpo today... or perhaps the Hall of Fame Dance Challenge is more your speed) and a big push by the Atlanta Convention & Visitors Bureau, Mark says. There’s been a significant amount of capital investment in Downtown in anticipation of the National Center for Civil and Human Rights and the College Football Hall of Fame, and many owners have been renovating and upgrading their hotels for the past few years (like the Days Inn-turned-Aloft at 300 Spring Street NW), a trend that will continue for the next three to five years.
And If GWCC's proposed 800- to 1,000-room hotel (above, what it could potentially look like) goes through, it will be Downtown's first major new hotel in decades, he says. As Downtown heats up, it will put pressure on Midtown and the airport submarkets, and Buckhead will follow. This year overall, PKF forecasts that Atlanta RevPAR will grow 6.3%, occupancy will rise to 1.9%, and ADR will increase 4.4%. Revenue then will continue its climb next year. Nationally, hotel profits are on pace to exceed pre-recession levels in 2014 as the combo of increasing ADR and the low-inflation environment means further double-digit profit growth through next year (and since it’s been happening since 2011, that’s the longest such streak for US hotels since the late ‘70s, according to PKF Hospitality Research).