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 from 2010 through 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 events and conventions were canceled; 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. A surge in leisure travel in 2021 and 2022, coupled with the return of most major events in 2022, positively affected hotel performance. Meeting/group demand also rebounded in 2022, while corporate travel continued to lag peak levels. According to Visit Music City, 14.4 million people visited the city in 2022, with 9.5 million room nights sold, equating to roughly $8.8 billion in spending. Year-to-date 2023 data indicate a continued increase in both occupancy and ADR, fueled by the entrance of new luxury hotels and the continued return of meeting/group business. Nashville's diverse economy and strong tourism industry, as well as 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)