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. In March 2020, the shelter-in-place orders caused cancellations of events at the Pennsylvania Convention Center (PCC), as well as the temporary freezing of leisure and corporate travel. Events at the PCC resumed in the summer of 2021 following a year-long closure. 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 levels; however, Philadelphia's RevPAR growth was below the average of the top 25 markets in the country. The opening of the Element by Westin in May 2021 and the W Hotel in August 2021 likely contributed to the below-average performance, although the influx of new supply should help the PCC attract larger events. Year-end 2022 data reflect stronger increases in occupancy and ADR levels, as larger-scale events have returned, commercial demand has increased, and domestic leisure demand has continued to rebound. However, international travel to the market is not expected to return to pre-pandemic levels until 2024/25. Over the long term, the market is well positioned for a strong recovery, supported by the diverse base of employers, the convention center, and the return of international tourism.

* 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:

Philadelphia RevPAR Change

Philadelphia RevPAR

For more information, please contact:

Scott Killheffer Senior Vice President Valuation, Market & Feasibility Consulting [email protected] +1 302 897-9393 (w)