United States -  St. Louis

Hotel demand in the St. Louis area has historically been supported by a diverse economy anchored by strong healthcare, education, and government sectors. Market occupancy declined in the early 2000s because of recessionary influences. In the mid-2000s, a rebound in demand fostered increases in ADR; however, this trend was accompanied by significant growth in supply, preventing occupancy from rising beyond 60.0%. Occupancy levels dropped to the mid-50s during the Great Recession, and ADR declined as well. Demand and occupancy levels recovered from 2010 through 2015, supported by the strengthening economy and a decrease in hotel supply, as a number of older, obsolete properties were closed during that period. These factors supported healthy ADR growth, and the market experienced five consecutive years of RevPAR growth over 5.0%. In 2016 and 2017, the pace of RevPAR growth slowed as supply levels began to increase. In 2018, occupancy fell below 65.0% and RevPAR dipped slightly; nevertheless, occupancy stabilized in 2019, as steadily increasing demand kept pace with supply growth. A stronger convention calendar provided a foundation for greater pricing power, resulting in modest ADR and RevPAR growth in 2019.

Hotel demand plummeted in March 2020 with the onset of the COVID-19 pandemic. Although occupancy levels improved and ADR declines became less severe in the latter half of 2020, annual RevPAR was less than half of the 2019 level. The market entered a recovery phase in April 2021, and performance accelerated through the remainder of the year, fueled by a surge of leisure travel and the re-emergence of commercial demand, as well as the return of conventions and major events. Demand continued to improve throughout 2022, as corporate employees gradually returned to offices and attendance at large conventions and events increased. Rising labor costs and the shift in leisure and business travel patterns caused hoteliers to aggressively exercise pricing power. As a result, ADR strengthened robustly in 2022, surpassing the pre-pandemic high by over 10.0%. Although occupancy continued to trail pre-pandemic performance, RevPAR for 2022 nearly reached the 2019 level. Looking forward, the market should be bolstered by the recent completion of a soccer stadium for a new MLS franchise and the ongoing renovation/expansion of the convention center, which is planned for completion in 2024. Overall, the diversity of employment sectors, positive convention outlook, and regional tourism attractions should provide a strong base for continued growth.

* 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:

Daniel McCoy, MAI
Senior Managing Director
Regional Practice Leader, Consulting & Valuation
[email protected]
  • +1 970 215-0620 (w)