Despite Booming Hotel Pipeline, DFW Is Lacking Luxury Offerings

While the Dallas-Fort Worth Metroplex has the biggest hospitality pipeline in the nation, the region is still trailing other major cities in the supply of luxury hotels. 

The developers behind a pair of adaptive reuse projects hope to help with that need by adding to the region’s high-end offerings. But researchers predict a significant drop in the region’s overall occupancy rate due to the new hotels preparing to flood the market.

Kintetsu Enterprises Company of America said in a filing it expects to begin work this year on a plan to turn the former JCPenney corporate campus in Plano into a 13-story, luxury Japanese-style hotel. That will follow Valencia Hotel Group’s Caravan Court Hotel redevelopment project, slated to bring a high-end boutique hotel to Arlington next year.

Those projects will help fill a hole in Dallas-Fort Worth’s high-end hospitality sector, said Marcus & Millichap Executive Managing Director of Investments Chris Gomes. 

"We don't have the super high-end hotels that we can find in Miami or L.A. or Chicago or New York," Gomes said of the DFW market. "There is definitely room there for ultra-luxury hotels, because that segment is growing."

Nationally, monthly revenue per available room declined nearly across the board during the second quarter, but in the luxury hotel segment, it climbed each month compared to 2024, according to the latest data from CBRE. DFW has similar numbers, with occupancy rates relatively flat, though average daily rate increases are driving RevPAR growth throughout much of the Metroplex, Gomes said. 

The region’s luxury and upscale segment is performing especially well in both regards, he said. 

Marcus & Millichap projects the Metroplex's hospitality supply across all product types will be up more than 3%, with over 3,700 keys expected to be delivered this year. It expects that abundance of new supply will lead to a 50-basis-point drop in occupancy in the metro.

Still, average daily rates are expected to climb for the fifth straight year, and the firm projects RevPAR will tick up to a new metro record of $84.82.

The growth of the local hotel sector has flourished in Fort Worth, though local officials say more rooms are still needed.

The city's overall supply of hotel rooms has grown 12% since 2021, while its upscale and luxury offerings have increased 30% during that time, according to Visit Fort Worth Chief Operating Officer Mitch Whitten. 

Luxury and upscale offerings like Bowie House and Hotel Drover won acclaim and helped raise Fort Worth’s profile, Whitten said. But the $701M Fort Worth Convention Center expansion will double the number of meetings and attendees the city can host once it wraps up in 2030. 

“Our study indicates we need an additional 1,000 rooms to accommodate the convention customers who want to be here,” Whitten said. “So we're focused on, by 2030, delivering more hotel rooms to go with the expanded and renovated space.”

With around 200 projects in the pipeline and more than 40 that have already broken ground, nearly every city in the Metroplex has new hotels on the way, Gomes said. But macroeconomic factors have delayed some projects. 

“We will see a lot of those projects get deferred,” Gomes said. “Some of them might come back once interest rates start dropping and construction financing availability becomes a little bit more widespread.”

The combination of high debt costs — the Fed began hiking rates in early 2022 and has kept them elevated — and rising construction costs has slowed development of luxury hotels in recent years, Valencia Hotel Group Executive Vice President John Keeling said during a Bisnow event last month.

“It is virtually impossible to build an upper upscale hotel now without some kind of help,” Keeling said, emphasizing the importance of securing a public-private partnership. “There's got to be something to make it work.”

The Metroplex is on pace to overtake Chicago as the nation’s third-largest metro by 2030, a shift that is expected to help raise demand for hotels throughout the region. 

The region also has many demand generators on the way, Gomes said. Those include the planned Texas Stock Exchange and the New York Stock Exchange reincorporating its Chicago branch in Dallas. The Metroplex will also host nine matches during the 2026 FIFA World Cup and an IndyCar Grand Prix next year in Arlington. 

Frisco saw a boom in luxury hotels following the prepandemic announcement of the PGA of America’s plan to move to the suburb. Growth is likely to drive the same phenomenon across the region, adding rooms, increasing occupancy rates and boosting the average revenue hotels earn from occupied rooms, Frisco Chamber of Commerce President and CEO Christal Howard said earlier this year. 

Developers have more than $8B in resort projects planned for the shores of Lake Texoma. Those luxury hospitality offerings could help turn the 76,000-acre reservoir into a leisure destination for travelers from across the country.

In addition to the adaptive reuse projects that will bring new luxury offerings to the region, Grapevine approved expansion plans for Hotel Vin this week. That expansion will double the size of the luxury boutique property from Coury Hospitality by adding a six-story building called Hotel Vin Reserve with 120 rooms.

Work on the 217-key Miyako Hybrid Hotel Plano from Kintetsu Enterprises was originally expected to start in 2022, but that didn’t come to pass, The Dallas Morning News reported. Once it is completed, the Miyako hotel is expected to accommodate Japanese employees visiting Toyota's North American headquarters while also serving as an experiential destination for American guests. Work on the project is slated to be completed in the summer of 2027, according to a filing with the Texas Department of Licensing and Regulation. 

Valencia Hotel Group started work on the Caravan Court Hotel in Arlington last year. That project is turning the former Caravan Motel property into a high-end boutique hotel.

“It will be an upper upscale full-service 145-room property that will be a magnet for people staying in Tarrant County,” Keeling said.

He teased another project the company is eyeing in Fort Worth that will compete “at the highest level” and could open in 2027, but he didn’t reveal any other details.

Between those projects and the demand generators on the way, Gomes said the Metroplex’s hotel industry is ripe for growth.

“In my opinion, 2026 should be a good year for DFW hotels,” Gomes said.