United States -  Seattle

Known as the Emerald City, Seattle is the hub for the greater Puget Sound region and home to corporate giants like Microsoft, Starbucks, Amazon, Nordstrom, Expedia, and Costco, among others. Much of the growth has been fueled by Amazon's continued expansion, coupled with a strong tourism and convention market, which have contributed to accelerated levels of value growth since 2012. The Seattle lodging market continues to perform extremely well, with market-wide occupancies approaching 76%, and average rates continuing to register gains. With a significant pipeline of new hotel supply set to open during 2017 and 2018, and the convention center facing capacity constraints, a slight moderation in hotel performance is expected in the short term. However, given the strength of the economy and the region's continued expansion, the outlook for the Seattle market remains extremely optimistic.

Although the meeting-and-group demand segment continues to grow, Seattle’s major driver for this segment, Washington State Convention Center (WSCC), is currently facing capacity constraints. A major expansion of WSCC is scheduled for groundbreaking in 2017 and completion by 2020, which will reportedly more than double the size of the existing space, adding 440,000 square feet of meeting space planned for the project. According to officials, the convention center is expected to garner strong interest in hosting events; however, until the expansion is complete, the center will not be able to support larger groups due to the size constraints of the facility, particularly during the summer months. Transient demand remains strong, as a growing cruise industry and other attractions remain in high demand. Operators are anticipating a flat to slightly reduced occupancy trend and fluctuating ADRs in the near term, as the new supply is absorbed. Following the ramp-up of new supply and an expanded convention center, occupancy is expected to increase to prior peak levels, and ADR growth is anticipated to resume.

With strong hotel performance rendering the construction of new projects feasible, coupled with the availability of construction financing, numerous projects have emerged in recent years. Several new, high-profile hotel projects are on the horizon. Approximately 30 hotel projects (more than 6,000 rooms) are proposed for the Seattle hotel market, with several projects slated to open in 2017 and 2018. The most notable proposed hotel in the region is the 1,260-room Hyatt Regency convention headquarters hotel, which is currently under construction; the remaining hotel projects are small to mid-sized, with only one other project containing more than 400 rooms. Despite a substantial increase in supply expected for the Seattle market, the long term economic growth for the region remains positive, and hotel values are forecast to remain stable in the near term.

As with many major markets, transaction activity in Seattle slowed in 2016. However, there were a handful of notable transactions, with purchase prices in excess of $500,000 per room. The sale of the Pan Pacific and Hotel Vintage in early 2017, at $516,000 and $657,000 per room, respectively, represented the top single-asset sales in 2017. Seattle continues to be viewed as one of the nation's top gateway cities, ensuring that hotel investors will continue to pursue assets in this market for their portfolio. Although there is a significant pipeline of new supply set to enter the market, the long-term outlook remains positive for Seattle given its diverse, expanding economy and the numerous public and private developments underway.

* 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%

Seattle RevPAR Change

Seattle RevPAR

Year RevPAR
2006 $79.94
2007 $87.29
2008 $86.05
2009 $69.21
2010 $72.24
2011 $78.69
2012 $85.62
2013 $92.41
2014 $104.01
2015 $113.16
2016 $116.57
2017 (f) $120.65
2018 (f) $116.91
2019 (f) $121.03

For more information, please contact:

Kasia Russell, MAI
krussell@hvs.com
  • +1 970 227-7799 (w)
Desiree Flanary, MAI
dflanary@hvs.com
  • +1 970 381-9794 (w)
Aaron Solaimani
asolaimani@hvs.com
  • +1 425 761-1699 (w)