Cincinnati is located on the southeastern Ohio border along the Ohio River. The metropolitan area encompasses a three-state region, including parts of Indiana and Kentucky. Top firms in Cincinnati represent key industries, such as aerospace, automotive, biotechnology, brand design, creative services, chemistry, financial services, IT services, and consumer goods. The city has been successful at not only retaining area businesses, but also at attracting new establishments. In 2016, GE opened its Global Operations Center in Downtown Cincinnati, which added over 1,300 jobs to the CBD. In 2017, Amazon announced plans to construct its first air cargo hub at Cincinnati/Northern Kentucky International Airport. The three-million-square-foot logistics center will employ over 2,900 people in Boone County, Kentucky, and is expected to open by 2021. The area’s low cost of living, aggressive development incentives, and excellent accessibility via multiple transportation routes have brought national recognition to the MSA. Furthermore, the greater Cincinnati area ranks in the top ten for the number of Fortune 500 and Fortune 1000 companies per million residents, which is a positive reflection of the region's strong economy and the city's high quality of living. Greater Cincinnati is home to headquarters for eight Fortune 500 companies, with the most prominent being Kroger, Macy's, and Procter & Gamble.
Cincinnati is experiencing record occupancy and average rate (ADR) levels, bolstered by the strong commercial, convention, and tourism sectors Downtown. Improvements in the economy and the increase in public and private investments have led to continued growth in hotel demand, with positive RevPAR growth year-over-year since 2012. In 2017, General Electric completed the employment ramp-up of its Downtown Global Operations Center, adding over 1,300 permanent jobs to the CBD. Furthermore, leisure demand continues to bolster occupancy in the region, highlighted by major events such as Zinzinnati Oktoberfest and BLINK. We note that occupancy declined in 2018, as supply increases outpaced demand growth.
The market area, which had relatively little new supply open in the five years prior, absorbed several new hotels from 2014 through 2018, including a Renaissance hotel in 2014 and a dual-branded Homewood Suites/Hampton by Hilton in 2015. In 2016, a Holiday Inn & Suites opened in Downtown Cincinnati, while the Hotel Covington opened in Downtown Covington, Kentucky, and a Hampton Inn & Suites by Hilton opened in Newport, Kentucky. Since January 2017, over 1,600 rooms have been added to the greater market, highlighted by the 202-room Dolce by Wyndham The Summit in April 2018. Supply growth shows no signs of slowing down, with hotels in the development pipeline in Northern Kentucky, the CBD, and Uptown, as well as the northern suburbs such as Mason, West Chester, and Blue Ash.
Fourteen hotels totaling approximately $123 million in transaction volume have sold since January 2018, averaging just over $66,000 per room. Notable transactions included The Kingsgate Hotel & Conference Center (formerly a Marriott), which is expected to be converted to the Graduate Hotels brand. Another notable transaction is the Marriott Cincinnati RiverCenter in Downtown Covington (highest total price paid $41,000,000, or $127,726 per room).