United States -  Orlando

In 2017, Orlando became the first U.S. destination to surpass 70 million annual visitors, and for the third year in a row can boast the title of "Most Visited Tourist Destination in the U.S.," reporting over 72 million visitors in 2017, up 5% from the previous record set in 2016. Orlando continues to be the gold standard of hospitality in the U.S. given its ease of accessibility, world-class entertainment and sporting venues, and wide-ranging hotel accommodation choices. The significant increase in a wide array of developments in recent years, as well as continued reinvestment into existing assets, is evident when driving throughout all corners of the Metro Orlando market. Occupancy and average rate both increased nearly 5% over 2016, resulting in a nearly 10% increase in RevPAR for 2017, breaching the $90 RevPAR mark. Through the first-quarter of 2018 occupancy and average rate have continued to build upon the success from 2017, as occupancy nears the mid-80s and average rate increased nearly $10 over the same period in 2017; moreover, RevPAR growth was nearly three times that of the average for the Top 25 markets. With all three indices recording continued growth in 2017, growth in 2018 in anticipated to be predominantly ADR-driven amid a steady increase in demand and limited new supply entering the market. Forecasted economic growth throughout the MSA, ongoing expansions at Orlando International Airport, and ongoing developments at area resorts and attractions should support demand growth in the near future.

The number of passengers utilizing Orlando International Airport surpassed Miami International Airport in 2017, making it the busiest airport in Florida. Through the first quarter of 2018, passenger traffic at Orlando International Airport continued to increase, as numbers show a nearly 8% increase over the same period in 2017. International passenger traffic increased by 13%, while domestic traffic increased by 7%. Much of this increase is attributed to new seats created from additional flights on Delta, JetBlue, Virgin Atlantic, and Spirit. These strong gains further support the nearly $3 billion in airport improvements underway, including the south terminal that is anticipated to open in 2020. The three major theme parks continued to open, construct, and invest in new attractions and hospitality projects, which further reflects the confidence and optimistic outlook. Furthermore, the region continues to buzz about Star Wars land project under construction at Walt Disney World Resort with an expected opening date in 2019. Moreover, the meeting-and-group demand segment continues to grow in the Orlando market. With over 2.5 million square feet of contiguous meeting space available, the Orange County Convention Center (OCCC) is the second-largest convention center in the nation. In 2017, the OCCC had a record year, as the facility drew an estimated 1.5 million attendees to the Metro Orlando area for a wide range of events. Construction work on Orlando’s infamous Interstate 4 continues to move forward, as the major transportation route is being transformed by a seven-year, $2.3-billion makeover, including the reconstruction of 21 miles of highway through two Central Florida counties. 

In 2017, supply increased by a mere 1.2% over 2016, and the number of hotel rooms added was under 1%. The primary source of new inventory to the Orlando market has occurred at Universal Studios. Universal's 1,800-room Cabana Bay Beach Resort was first announced in July 2012, and officially opened to guests two years later in March 2014. That was followed by the announcement of the 1,000-room Loews Sapphire Falls Resort in September 2014, the same year Cabana Bay opened, with the hotel welcoming its first guests in July 2016. In November 2016, Universal announced a new 600-room tower, Aventura Hotel, which is scheduled to open in August 2018. Redevelopment plans were revealed in 2017 for a massive 2,800-room hotel project on the site of the former Wet 'N Wild water park. Plans show that the "beach themed" developments will be split into two towers including a 750-key structure and a 2,050-key structure. A trend to keep an eye on is the transformation of theme parks into destination resorts by the addition of themed hotels, including a rumored Star Wars themed resort, as well as retail, dining, and entertainment developments, which can have a profound impact on the economics of these attractions. Additionally, Margaritaville Resort Orlando is anticipated to open the initial phases in 2018.

By far the biggest single-asset transaction in the Orlando Metro in 2017 was the Xenia Hotels & Resorts acquisition of the 815-room Hyatt Regency Grand Cypress for $205.5 million ($252,000 per room) in May. On a price-per-key basis, this sale ranks eighth among the highest-value hotel deals in the Orlando market since 2012. Additional transactions of limited-service product occurred in the Lake Mary submarket, which is a heavily corporate-driven market. Through May 2018, major transactions included the Blackstone REIT purchase of the newly opened, dual-branded, 134-key SpringHill Suites and 120-key Residence Inn by Marriott near Orlando's Mall at Millenia for a reported $48-million, which was developed through a JV of PRISA Group and Peachtree Hotel Group. Orlando continues to be viewed as one of the nation's top 25 primary markets, ensuring that hotel investors will continue to pursue assets in this market for their portfolio. Ongoing expansions and developments at area resorts and attractions are expected to support demand growth in the near future. Moreover, Orlando's diversification into the health services sector and its recognition as a national corporate headquarters location will further bolster Orlando's presence on the national stage.

* 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:

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%

Orlando RevPAR Change

Orlando RevPAR

Year RevPAR
2007 $71.80
2008 $69.34
2009 $56.26
2010 $58.02
2011 $63.68
2012 $66.77
2013 $71.74
2014 $79.37
2015 $86.21
2016 $87.53
2017 $96.19
2018 $104.01
2019 (f) $110.33
2020 (f) $115.33

For more information, please contact:

Donald Stephens Jr.
[email protected]
  • +1 407 203-1122 (w)
  • +1 407 405-4363 (m)
Jeffrey Pennington
[email protected]
  • +1 850 766-6109 (w)