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. The market suffered occupancy declines in the early 2000s because of recessionary influences. In the mid-2000s, the market realized a rebound in demand that fostered stronger increases in ADR; however, this trend was accompanied by significant growth in supply, preventing occupancy from rising beyond 60%. 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 declined below 65% and RevPAR fell 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.

In early 2020, the outlook for the market was relatively positive, with multiple major events planned for the year, and a strong convention calendar on the books. However, hotel demand plummeted in late March with the implementation of government and corporate travel restrictions related to the COVID-19 pandemic. Both occupancy and ADR levels plunged as formerly higher-rated corporate, meeting, and event demand evaporated. Although hotel occupancy levels improved and ADR declines became less severe in the latter half of 2020, annual RevPAR for 2020 was less than half of the 2019 level. As restrictions on business activities and group events were eased, the market entered a healthy recovery phase in April 2021. This upward trend accelerated through the remainder of 2021, fueled by a surge of leisure travel and the recovery of corporate travel, as well as a resumption of conventions and major events. In the coming years, a full recovery of the market should be bolstered by a renovation and expansion of the convention center and the ongoing construction of a soccer stadium for a new MLS franchise, both of which are planned for completion in 2023. Overall, the market’s diversity of employment sectors, positive convention outlook, and regional tourism attractions should provide a strong base for demand recovery and 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)