United States -  Philadelphia

Although the greater Philadelphia market was affected by the Great Recession, the impact was relatively short-lived, with occupancy declining in 2008 and 2009, and ADR falling in 2009 and 2010. RevPAR declined by about $12.00 from 2007 to 2010. Since then, the pace of the recovery has been generally strong, with the exception of a slight dip in RevPAR in 2013, largely attributed to a drop in market-wide occupancy as new supply entered the greater area. Nonetheless, ADR registered year-over-year growth from 2011 through 2016, with major events such as the expansion of the convention center, the Papal visit in 2015, and the Democratic National Convention (DNC) in 2016 contributing to the rate increase. Moreover, while occupancy and ADR dipped slightly in 2017 because of the market normalizing from higher rates and reduced demand levels attributed to the DNC, RevPAR resumed a strengthening trend in 2018 and 2019; this increase is due to the Philadelphia Eagles winning the Super Bowl in 2018, as well as the continued entrance of new, higher-rated hotels to the market and several hotel properties undergoing renovations.

The Philadelphia market was severely affected by the COVID-19 pandemic and the related decline in travel in 2020. The magnitude of the decline was due to the impact of the pandemic on the leisure segment, particularly international tourism, as well as across the meeting/group segment. In March 2020, many conventions and groups postponed or canceled events, largely affecting hotels near the Pennsylvania Convention Center (PCC), as well as hotels that capture overflow demand from these major events. Events at the PCC resumed in the summer of 2021, following a year-long closure as the convention center served as hospital overflow and then a vaccination site. New supply has rapidly changed since the onset of the COVID-19 pandemic, as some planned hotel developments were canceled. Year-end 2021 data reflect strengthening occupancy and ADR for the Philadelphia market; however, RevPAR growth for Philadelphia in 2021 was below the average of primary markets in the country. The opening of the Element by Westin in May 2021 and the W Hotel in August 2021 likely contributed to a below-average performance for the market in 2021, although the influx of new supply should help the PCC attract larger events in the future. Over the longer term, the market is well positioned for a strong recovery, supported by the diverse base of employers and the convention center, which has historically attracted large-scale events, as well as the anticipation that international tourism will return.

* 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: More than -10%

For more information, please contact:

Jerod Byrd, MAI
Managing Director
Valuation, Market & Feasibility Consulting
[email protected]
  • +1 901 481-3058 (w)