The “Big Three” automakers, local employers and office headquarters, conventions, and leisure destinations represent the primary sources of lodging demand for the greater Detroit market. Following RevPAR growth from 2003 through 2007, the entrance of extensive new supply in late 2007, which included two 400-room casino hotels, coupled with the onset of the recession, resulted in a subsequent decrease in RevPAR. This downward trend continued through 2009, concurrent with the near-collapse of the U.S. automotive industry. In 2010, occupancy rebounded, and ADR growth resumed in 2011 as the automotive industry and national lodging market began to recover. RevPAR surpassed the prior peak in 2013 and continued to increase year-over-year through 2018. Increases in commercial activity throughout Metro Detroit brought on by a more diverse economy, record levels of tourism, and the continued presence of citywide events, such as the North American International Auto Show, contributed to this year-over-year growth. Despite increasing demand levels in 2019, RevPAR decreased slightly given the decline in occupancy, as a large amount of new supply had recently entered the greater Detroit market.

The COVID-19 pandemic significantly affected the greater Detroit lodging market, as evidenced by the nearly 58.0% decline in 2020 RevPAR when compared with the 2019 level. Upon the lifting of pandemic-related restrictions, occupancy and ADR recovered slightly in the summer months, driven by the increase in leisure demand. However, many major employers throughout the region were reluctant to bring their workforces back to their offices in 2021, and large events such as the International Auto Show were absent. As such, RevPAR levels in 2021 remained well below the levels achieved from 2015 through 2019. Demand levels continued to recover throughout 2022, primarily led by an increase in meeting and convention business, as well as strong leisure demand. However, lagging international and commercial travel resulted in occupancy remaining below pre-pandemic levels. Meanwhile, ADR reached a historical peak by year-end 2022, supported by the entrance of higher-rated new supply and an influx of pent-up leisure demand during the summer months. The long-term outlook is positive, as continued commercial development, increased international travel, and Detroit's growing popularity as a tourist destination should drive demand growth.

* 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.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

Change In Value For Market:

Detroit RevPAR Change

Detroit RevPAR

For more information, please contact:

Brandon Leversee Director Valuation, Market & Feasibility Consulting [email protected] +1 269 303-5551 (w)