Tampa, FL Hospitality Market Report
In H1 2023, Tampa’s hospitality market experienced a notable increase in RevPAR, primarily driven by a rise in ADR. The group segment has been the main driver of growth this year, while transient leisure travel has seen a slowdown. Economic concerns and a possible recession in the later months of 2023 are expected to limit further growth, with increasing hotel room supply outpacing demand. Tampa’s hospitality inventory has seen expansion, with a new luxury property that opened in May 2023, which marked the city’s first luxury brand property outside the Central Business District.
- Tampa’s hospitality industry is primarily driven by its highly rated beaches and attractions, such as Busch Gardens amusement park, the cultural appeal of Ybor City, and various events and sports games in the area.
- Tampa International Airport, ranked first among large airports in the 2022 J.D. Power Airport Satisfaction Survey.
- RevPAR in Tampa has increased by 10.2% in the last 12 months to a current rate of $110.32.
- In the next year, additional transactions are expected in Tampa as 29 properties on CMBS loans are set to mature.
Tampa’s hotels saw a 7.0% growth in RevPAR during H1 2023. Year-to-date data through June revealed a 7.0% increase in ADR, although occupancy remained unchanged. The group segment played a significant role in the first half of 2023’s growth, with group ADR rising by 12% compared to the previous year, while transient ADR increased by 5.0%. Changes in travel patterns, strong demand in other urban destinations, and a rebound in travel to various international regions will affect demand and pricing. The opening of 1,100 rooms by the end of 2023 will put pressure on occupancy rates. Economic factors such as inflation and high interest rates are predicted to impact travel for the remainder of the year, as a majority of excess savings accumulated during the pandemic have been spent. Modest ADR growth is projected for the remainder of 2023, but no RevPAR growth is expected due to lower occupancy
- Average Occupancy: 69.8%
- RevPAR: $110.32
- ADR: $158.09
Currently, there are nine properties with approximately 1,100 rooms under construction in Tampa, accounting for 2.0% of the city’s existing room supply. One notable addition in 2023 is the 172-room AC Hotel by Marriott St. Petersburg, which opened in February. Tampa welcomed its second new luxury property in less than a year with the opening of the 194-room JW Marriott Tampa Clearwater Beach in May 2023. The potential for robust growth in room inventory in the coming years exists, with over 1,300 rooms in the final planning stages set for opening by 2025.
Thirty-three hotels traded during H1 2023, and sales volume totaled $494 million, representing a decrease of more than 30% compared to over $740 million during the same period the previous year. Despite the decrease in transactions and sales volume from 2022 levels, the average price per key in hotel sales during H1 2023 was approximately $218,000, compared to around $183,000 per key in H1 2022. A notable sale in the first half of the year was the Doubletree by Hilton Rocky Point Waterfront, which traded for $75.9 million ($261,000 per key) in January.