Seattle is home to a diverse set of industries, including aerospace and defense, high technology, transportation and logistics, telecommunications, education, and health care. The city is also a popular leisure destination, especially during the peak summer months. Occupancy levels increased annually from 2003 through 2007 during a strengthening economy, primarily led by the high-tech sector. Similar to national trends, occupancy declined in 2008 and 2009 because of the recession, although declines were more tempered when compared with other top U.S. markets during that period. Occupancy started to increase again in 2010, a trend that continued through 2015. In 2016, however, the strengthening U.S. dollar affected leisure travel to/from Canada during the shoulder periods. Furthermore, supply growth outpaced demand growth that year, leading to a nominal decline in occupancy and relatively moderate ADR growth. Nonetheless, occupancy rebounded to an all-time high in 2017. Despite continued supply increases, lodging demand was fueled by the significant development projects and company expansions in the metro area, which resulted in occupancy levels in the mid-70s through 2019.

The effects of COVID-19 on the Pacific Northwest have been catastrophic, particularly on the hospitality industry. Seattle effectively shut down in early March 2020, and attempts to reignite the local economy faced multiple setbacks. More than 40 national convention cancellations, the shuttering of the 2020 cruise season, the halt of inbound domestic and international travel, and dozens of hotels temporarily ceasing operations resulted in revenue losses for local hotels of nearly 70% compared to year-end 2019 revenue. Prolonged negative national publicity, coupled with local challenges surrounding houselessness and crime, highlight a sobering reality that the Seattle hotel industry faces challenges in returning to life and business as they were prior to 2020. Positive momentum in 2021 from a strong start to the summer season, the partial return of the Alaska cruise season, increased border crossings from Canada, and growing passenger traffic at Seattle International Airport propelled Seattle’s RevPAR to increase nearly 60% from the level achieved in 2020. Nonetheless, renewed testing requirements for Canadian travelers, coupled with Omicron fears, have tempered optimism about office workers returning to the city’s urban core in the first quarter of 2022. The pace of the city’s recovery in 2022 and beyond will be tied to the increases in commercial and meeting/group travel.

* 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:

Seattle RevPAR Change

Seattle RevPAR

For more information, please contact:

	Kasia Russell, MAI Senior Managing Director Regional Practice Leader, Consulting & Valuation [email protected] +1 970 227-7799 (w)
	Breanna Smith, MAI Senior Vice President Valuation, Market & Feasibility Consulting [email protected] +1 303 667-8860 (w)