United States -  Philadelphia

The area's many colleges and universities make Philadelphia a top international study destination, as the city has evolved into an educational and economic hub. The University of Pennsylvania is home to a diverse full-time undergraduate student body of nearly 10,500, hailing from every state in the union and all around the globe. Admissions are among the most selective in the country, and Penn consistently ranks among the top ten universities in the annual U.S. News & World Report survey. The Pennovation Center, a three-story facility consisting of 58,000 square feet of redeveloped industrial space, was completed in September 2016; it serves as a hub to facilitate and accelerate entrepreneurial activities, collaborations, and research discoveries at Penn. Other higher-education institutions include Temple University, Drexel University, Philadelphia University of the Sciences, and Philadelphia College of Osteopathic Medicine. The healthcare sector in Downtown Philadelphia also remains a significant demand driver in this area, as Jefferson Health System is the largest health system in Southeastern Pennsylvania. In 2017, U.S. News & World Report ranked Jefferson Health System's hospitals among America's best hospitals, and the company was also named one of the nation's Top 15 Largest Health Systems by Thomson Reuters. Lodging trends for 2017 illustrate relative stability, with market-wide occupancy, average rate (ADR), and RevPAR registering modest declines given the increase in new hotel supply.

Demand for the Philadelphia market is generated by a multitude of nationally known employers, including Comcast, Independence Blue Cross, Jefferson Health System, and the University of Pennsylvania, among many others. Continued growth and development in Downtown Philadelphia is evident, including the ongoing construction of the new Comcast Innovation and Technology Center, which is expected to open in late 2018. The new facility will boast 1.5 million square feet of office space, three television studios, a retail mall, and a 200-unit Four Seasons hotel. Additionally, the Downtown neighborhood's proximity to many law firms should further bolster corporate demand. Furthermore, the Pennsylvania Convention Center stimulates a significant amount of demand for Greater Philadelphia hotels throughout the year, albeit to a lesser degree than in prior years because of new supply continuing to enter the downtown area and absorbing a majority of the group-related business, as opposed to the hotels in the outskirts of the city. Additional increases should occur through the stabilized year, as large events continue to fill the books in the coming years. Lastly, tourism is expected to remain healthy given the numerous sites and attractions throughout the Philadelphia area, along with the numerous sports and concert events held throughout the year.

In recent years, hotel supply growth has remained modest, with a more noticeable increase registered in 2017. Many of the proposed hotel projects slated for the Greater Philadelphia market appear to be appropriately located in areas primed for further demand growth. Overall, the entrance of new supply should be kept in check, in relative equilibrium with the anticipated expansion of demand.

The pace of local transactions remained somewhat limited in 2017, a continuation of the trend from recent years, as most property owners in the region have taken a buy/build-and-hold approach. Transaction highlights in 2017 for the city were limited to the 189-unit Westin Philadelphia and the Wyndham Philadelphia Historic District for $135 million ($459,000 per key) and roughly $38 million ($105,000 per key), respectively. No other major transactions were reported for 2017; however, the first quarter of 2018 indicates an increase in transactions from last year, with three hotels selling for a total of over $250 million.

* 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%

Philadelphia RevPAR Change

Philadelphia RevPAR

Year RevPAR
2007 $82.35
2008 $80.06
2009 $67.75
2010 $69.14
2011 $75.71
2012 $79.66
2013 $78.99
2014 $82.69
2015 $87.26
2016 $91.62
2017 $89.10
2018 $91.34
2019 (f) $94.09
2020 (f) $96.92

For more information, please contact:

Jerod Byrd, MAI
[email protected]
  • +1 901 481-3058 (w)
Scott Killheffer
[email protected]
  • +1 302 897-9393 (w)
Dinaker Mallya
[email protected]
  • +1 484 557-1668 (w)