The Developing Story: Charleston

With a charming culture and expanding economy, this city is a go-to destination for tourists and developers alike.

Charleston may not be a top 25 market, but it sure acts and performs like one. The oldest city in South Carolina improves with age, boasting a long list of demand generators that drive hotel business. With its cobblestone streets, antebellum architecture, thriving arts and restaurant scene, pristine beaches, and rich history, Charleston is a renowned tourist destination that consistently ranks as one of the top cities to visit in the country. “Charleston has traditionally been a good market, but it’s really taken off in the last few years,” says Jill Bidwell, vice president at PKF Consulting.

In addition to tourism, Charleston’s strengths include a highly diverse economy with a modernizing seaport and strong population growth. Thanks to Boeing, the city has also become an aerospace products and parts manufacturing hub that is responsible for an estimated 30,000 to 40,000 room nights each year, according to Bidwell. That demand could increase when Boeing adds a painting facility in late 2016.


During the expansionary phase of an economic cycle, developers favor high-rate markets, and ADR in Charleston has grown at or above national trends, says Ros Mallory, SVP for Jones Lang LaSalle’s Hotels & Hospitality Group. “That’s why people continue to look and want to build there,” Mallory says. “And the market absorbs new supply very well.”

Big hotel projects coming on line this year include the dual-branded Hyatt Place and Hyatt House Charleston/Historic District, which will bring 304 rooms to the vibrant Upper King area when it opens in June. The developers building hotels south of the Septima Clark Parkway on the peninsula are restricted by a 50-room limit per parcel, which means more boutique hotels are cropping up.

To view our market overview, click here.

Mark Kessler, president and COO of The Kessler Collection, says it took 10 years to find the right piece of land to build on in Charleston. Come this June, the small boutique company will open the 50-room Grand Bohemian Hotel in Charleston’s Historic District at the corner of Wentworth and Meeting streets.

  • Charleston has great history, architecture, food, culture, and friendly hospitable people. It’s a very good market from an investment point of view; we can only build 50 rooms there, and we knew we would fill up.
  • We drew our design inspiration from the French Huguenots who settled in Charleston in the late 1600s. We’re really playing on the overall French elegance and mixing that with contemporary bohemian influences and finishes that would be indicative of the Lowcountry of the South.
  • We’re bringing our Grand Bohemian art gallery, featuring works by international, regional, and local artists. We’ll also have art featured in the public spaces, corridors, and guestrooms.
  • This will be the first hotel where we’ve done a wine blending room. We’ve partnered up with a vineyard out of Napa Valley, and we will be doing a 60- to 90-minute wine blending seminar.