Dallas RevPAR Projections Are Half The National Average
Though national revenue per available room is projected to increase by 3% nationally in 2017, new data from CBRE Hotels shows that increase to be around 1.4% in Dallas. Though the local growth is only half of the national average, Dallas hotel experts think the market looks healthy.
Q1 2017 saw a dip in Dallas hotel occupancy, but CBRE Hotels Consulting Director Jeff Binford said that is the result of new development investments. There is more supply online or in the pipeline than there is demand, Binford said.
CBRE Hotels expects this trend to continue in the area for the next few years before returning to long-term increases in supply and demand.
The DFW hotel market is extremely healthy, Dowdle Real Estate President Lynn Dowdle said. RevPAR and average daily room rate are high, occupancy is solid and new product is getting saturated, she said.
Hotel supply in the U.S. is expected to grow by 2% in 2017, compared to a 2016 gain of 1.6%, according to Hotel Horizons. Lodging demand is expected to increase by 2.1% this year.
“We’re seeing that DFW is a top market; hoteliers are flocking here,” Dowdle said.
Over the seven years since Dowdle founded her firm, she has seen growth in a few ways. The 13.6B Marriott-Starwood merger in 2016 has put the new conglomerate in growth mode. “They are strategizing growth plans,” Dowdle said.
Another recent growth trend has been the rise of hotels within mixed-use developments.
Dowdle said she used to have to convince mixed-use developers to explore hotel options, but it is becoming more commonplace.
“The hotel component [in mixed-use developments] is gaining ground in terms of demand. It only makes sense to include a hotel if you’re offering any kind of office setting, and now developers know it’s important,” she said.
CORRECTION June 8 at 5:40 p.m. ET: Inaccurate data on RevPAR forecasts in Dallas in an earlier version of this story have been updated.