United States -  St. Louis

The St. Louis hotel market continued to strengthen in 2016, maintaining a historically high market-wide occupancy level, with average rates for the region topping $100 for the first time. The area benefits from a diverse economy that provides a solid foundation for steady economic growth, anchored by strong healthcare, education, manufacturing, and government sectors, as well as growing financial services and life-science industries. Several major developments, the continued expansion of area business, and a burgeoning tech start-up industry are positively affecting the greater St. Louis economy and hotel demand.

According to officials with the St. Louis Convention & Visitor’s Commission, 2016 attendance at The America’s Center Convention Complex was slightly below the 2015 peak; however, the outlook for 2017 is stronger. Significant investments in new leisure-demand generators are underway, including the $380-million renovation of the Gateway Arch and the surrounding grounds, which is scheduled for completion in 2017. Additionally, the owners of historic Union Station are moving forward with a $70-million redevelopment, including a fire, light, and laser show; a 200-foot Ferris wheel; and a 75,000-square-foot aquarium. Commercial demand in the City of St. Louis should be most directly affected by the construction of the new, $1.75-billion western headquarters of the National Geospatial Intelligence Agency, as well as the continued growth of the Cortex Innovation Community, a regional hub of bioscience and technology research. Other major regional developments and expansions that bode well for increased commercial demand include Pfizer's plans for a new, $200-million campus, and Centene Corporation's $770-million expansion of its Clayton headquarters campus.

In recent years, the growth in the supply of hotel rooms has remained modest; however, as overall development activity ramps up, hotel development is expected to follow suit. We are currently tracking approximately 35 proposed projects that represent more than 4,000 rooms, although we note that some of the more speculative and complex projects may take several years to come to fruition, if at all. Many of the proposed hotel projects appear to be appropriately located in areas primed for further demand growth. Much of the new supply is concentrated along the Interstate 64 corridor in St. Louis and Clayton, which aligns with some of the region’s most impactful demand-side expansions. Overall, the outlook for supply growth appears measured and in relative equilibrium with the anticipated expansion of demand.

The pace of local transactions remained somewhat subdued in 2016, a continuation of the trend from recent years, as many property owners in the region have taken a buy/build-and-hold approach. Transaction highlights in 2016 included the sale of the Hilton Downtown to an owner that will convert the property to a Hilton Garden Inn. Another significant transaction in 2016 was the sale of the former Omni Majestic Hotel; new ownership reportedly plans to redevelop the property as an upper-upscale lifestyle product.

* 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%

St. Louis RevPAR Change

St. Louis RevPAR

Year RevPAR
2006 48.79
2007 51.58
2008 50.56
2009 44.37
2010 46.03
2011 48.92
2012 52.17
2013 55.94
2014 61.57
2015 64.71
2016 66.52
2017 (f) 69.35
2018 (f) 71.78
2019 (f) 73.56

For more information, please contact:

Daniel McCoy, MAI
DMcCoy@hvs.com
  • +1 970 215-0620 (w)