Hotel Construction Update
With construction financing becoming more widely available, developers have been aggressively moving forward with new hotel projects. Some highlights include the recently opened 800-room Omni Nashville Hotel; the 192-room Homewood Suites by Hilton, which also recently opened; and the Hyatt Regency, Marriott, and Westin projects that are in early stages of development.
The potential for hotel development does not come as a surprise given the Nashville market’s recent performance gains and a lack of new supply. The Music City Center convention complex, which opened in May of 2013 in Downtown Nashville, has been a further impetus for hotel development. Most of the proposed hotel projects in the city are planned for the southern section of downtown, proximate to Music City Center and the 800-room Omni headquarters hotel; two of these hotels, the 400-room Hyatt Regency and the 400-room Marriott, are the most recent beneficiaries of the city’s attractive tax-incentive policy.
Even with the significant number of new hotel rooms in the pipeline, the impact of supply growth in Nashville is expected to be modest. Market participants note that even before the opening of the new convention center, the market had been routinely selling out on multiple nights per week throughout the year.
Now well beyond the recovery phase following the recent recession, Nashville’s economy and hotel market have entered into a period of expansion. The market offers attractive opportunities for investors seeking hotel acquisitions, as well as selective opportunities for repositioning existing hotels and breaking ground on new developments. Overall, the outlook for Nashville’s hotel industry is positive, with an expectation of steady growth over the near term.
This report was compiled with data from HVS and contributed by Ryan Wall and Daniel P. McCoy, HVS St. Louis.
Photo credit: Nashville Skyline via BigStock