United States -  Wilmington

Known as the “Corporate Capital of the World,” Delaware legally houses more than half of the nation’s Fortune 500 companies. Apart from the corporations that belong to it on paper, Wilmington, Delaware’s largest city, also houses a wealth of brick-and-mortar businesses, healthcare providers, and universities. Wilmington sits between the major metro regions of New York City and Washington, D.C., providing the city with cross-traffic in the form of business travel. The location, entrepreneurial spirit, and economic drivers of Wilmington, New Castle County, and greater northern Delaware have proven advantageous to the region’s economy. The local lodging market has also benefited from the generation of commercial and group demand. The recent layoffs with DuPont and AstraZeneca have contributed to a minimal increase in unemployment; however, continuing job growth within the finance sector has offset majority of the layoffs in the last several months.

As companies in Wilmington have exercised downsizing in recent years, commercial demand is expected to decline modestly; however, it should be noted that a substantial portion of demand surrounding the legal needs of the many companies incorporated in the state remains. Chemours, a spinoff of DuPont's chemicals entity, has begun to occupy certain vacated portions of DuPont's commercial offices, promising to compensate for a portion of the jobs lost by the recent layoffs from its former parent company. The recent addition of the Westin Wilmington Riverfront, attached to the Chase Center on the Riverfront, is capturing new meeting and group demand that was not obtained in previous years. Nonetheless, the downsizing of the state's largest employers continues to loom over the economic outlook for the Wilmington market. Operators are anticipating a flat to slightly reduced occupancy trend, but remain optimistic, as Wilmington continues to compensate with new businesses to replace the former.

While only one property has entered the Downtown Wilmington area within the last several years (Westin Wilmington Riverfront), an additional four hotel projects (roughly 500 rooms) are proposed for the market in the next several years. In a proactive effort by the market, several hotels in the Wilmington market have undergone extensive renovations in the last two years, as well. The additions of new supply and upgrading of existing supply should support RevPAR growth in the coming years, averaging roughly 3.0 to 4.0% yearly through 2019, with values increasing accordingly.

According to research performed by HVS, no hotel transactions occurred in the Wilmington market in 2016. Activity resumed in 2017, with the Hotel DuPont representing the most notable sale. As the most iconic hotel in Downtown Wilmington, the Hotel DuPont was purchased by the Buccini/Pollin Group from DuPont in January 2017. Reportedly, several hotels in the Wilmington market may soon be available for purchase, especially within the full-service hotel sector; as such, upcoming transaction activity is expected to outpace the number of transactions in 2015. While overall growth has slowed in 2016, the outlook remains positive for Wilmington given its diversifying economy.

* 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%

Wilmington RevPAR Change

Wilmington RevPAR

Year RevPAR
2006 $61.18
2007 $64.74
2008 $60.19
2009 $48.08
2010 $52.86
2011 $58.33
2012 $59.51
2013 $62.20
2014 $67.70
2015 $67.69
2016 $69.84
2017 (f) $71.24
2018 (f) $73.39
2019 (f) $75.97

For more information, please contact:

Jerod Byrd, MAI
jbyrd@hvs.com
  • +1 901 481-3058 (w)