Nashville has historically been one of the strongest lodging markets in the United States given its designation as a top-tier travel destination and its diverse economy, inclusive of strong employment in the medical, manufacturing, music/entertainment, and tourism industries. Market demand levels improved steadily and significantly between 2010 and 2019, attributed to a variety of factors, including the opening of the Music City Center; corporate expansions and relocations in the area, including firms such as Nissan North America and HCA; and the increased international reputation of Nashville as a premier tourism destination. After rising from 2003 through 2006, occupancy levels declined through 2009, similar to national trends amid the Great Recession. However, occupancy began to recover in 2010, and lodging fundamentals improved through 2016, with RevPAR increasing by double digits from 2013 through 2015. This period of strength led to a rapidly growing new supply pipeline, prompting a modest decline in occupancy in 2017 and 2018. This stabilization in occupancy can be attributed to a record number of both transient and group visitors to the area. Moreover, the entrance of new upper-upscale and luxury hotels supported consistent ADR growth from 2011 through 2019.

The Nashville lodging market experienced a rapid decline in both occupancy and ADR following the onset of the COVID-19 pandemic in March 2020. Many of the city's hotels closed for weeks as countless events and conventions were canceled amid the early uncertainty of the virus. However, the area faced fewer local restrictions than other major metropolitan areas during the pandemic, allowing for a recovery to begin in June 2020. Following the lifting of all pandemic-related restrictions in May 2021, performance at area hotels rebounded significantly, particularly in terms of ADR growth. While major events were canceled in 2020 and 2021, they returned in 2022, further aiding in lodging recovery during the summer months. Meeting/group demand and corporate travel remained suppressed through 2021; however, strong leisure demand led to peak ADR levels in the spring of 2022. Meeting/group demand also rebounded in 2022, while corporate travel continued to lag peak levels, as companies maintained work-from-home or hybrid work models. According to Visit Music City, the city reached multiple visitation records in 2022, including 14.4 million visitors and 9.5 million room nights sold, equating to roughly $8.8 billion in spending. Nashville's diverse economy, strong tourism industry, and corporate relocations to the area should support long-term 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:

Nashville RevPAR Change

Nashville RevPAR

For more information, please contact:

Marc Greeley Director - Nashville Office Leader Valuation, Market & Feasibility Consulting [email protected] +1 615 426-8806 (w)