United States -  Charlotte

The Charlotte hotel market continued to strengthen in 2016, reaching a historically high market-wide occupancy level of roughly 72%, and average rate climbing slightly above $105. Charlotte benefits from strong diversification efforts. The city, which is home to the University of North Carolina Charlotte (UNCC) and eight Fortune 500 company headquarters, enjoys robust financial, healthcare, and retail sectors, as well as strengthening manufacturing, energy, and technology industries. Affordable cost of living, relatively low unemployment figures, and a diverse economy remain attractive to business professionals and families. Mixed-use developments boasting office, retail, and residential components continue to be developed throughout the city to accommodate the commercial and population growth. Additionally, the live-work-play focus in Uptown, redevelopment of the South End, and beautification efforts in University City will continue to spur growth within the entire Charlotte market.

According to the Charlotte Regional Visitors Authority, despite House Bill 2 (known as “HB2”) that was signed into law on March 23, 2016, aggressive marketing efforts helped increase attendance at the Charlotte Convention Center nearly 6% year-over-year in 2016. It is imperative to note that House Bill 142 was passed on March 30, 2017, which repealed HB2. As such, meeting/group and leisure demand should strengthen in 2017. The commercial segment remains a vital demand driver. Class-A office towers and build-to-suit office buildings are being erected throughout the city, most notably in Uptown. The Lincoln Harris and Goldman Sachs mixed-use development on the former Charlotte Observer site in Uptown will feature an 845,000-square-foot office tower, of which 500,000 square feet has already been leased to Bank of America, to commence in late 2019. Moreover, Charlotte's light-rail service, the LYNX Blue Line, is undergoing a detailed extension from Uptown to the University of North Carolina at Charlotte (UNCC); the new extension is slated to begin operation in August 2017.

Supply growth has remained moderate in recent years, adding guestroom inventory to each of the submarkets. Although approximately 50 hotel projects (roughly 7,000 rooms) have been proposed for the Charlotte market, it is important to note that while roughly half are currently either under construction or in the active planning phases, the more speculative projects may take several years to come to fruition. In early 2017, announcements were made that two significant projects, the InterContinental Hotel and the Grand Bohemian Hotel, each with approximately 250 rooms, would proceed for the Uptown area. A key consideration is that much of the new hotel supply will enter submarkets such as Southwest Charlotte, Uptown, South End, SouthPark, and Ballantyne, which are experiencing a simultaneous increase in office and residential developments. As such, the anticipated demand growth should absorb a substantial portion of the additional guestroom inventory.

The pace of transactions in the Charlotte market remained modest in 2016, with some activity among the nationally branded, limited- and select-service assets. However, activity picked up during the first quarter of 2017; the number of transactions during that period exceeded the count for all of 2016. The sale of the Ballantyne Hotel, as part of the Ballantyne Corporate Park purchase by Northwood Investors, represented a significant real estate sale in the market. Three additional hotels were included in the sale of the Park, namely the Aloft, Courtyard by Marriott, and Staybridge Suites. The Ballantyne Hotel, which also features The Lodge at Ballantyne and The Cottage at Ballantyne, will remain a Luxury Collection Hotel by Marriott.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Charlotte RevPAR Change

Charlotte RevPAR

Year RevPAR
2006 47.61
2007 54.02
2008 51.97
2009 41.71
2010 46.06
2011 50.50
2012 56.72
2013 57.39
2014 64.28
2015 70.09
2016 76.20
2017 (f) 77.60
2018 (f) 78.29
2019 (f) 83.45

For more information, please contact:

Janet Snyder
jsnyder@hvs.com
  • +1 972 978-4714 (w)
Patricia Shih
pshih@hvs.com
  • +1 404 791-5509 (w)