Q1 2025 Dallas Hospitality Market Report

Key Findings

• The Dallas hospitality sector is among the top three markets for rooms under construction nationally.
• The Dallas CBD will see two new luxury additions, with InterContinental Dallas finalizing this year and Auberge Resorts Collection expected for completion in 2026.
• Half of Dallas-Fort Worth’s sales over the past 12 months occurred in the South/East, CBD/Market Center, and Denton/Lewisville/McKinney submarkets.

DFW Travel

Total Passengers at DFW for March 2025: 7,288,446

While Dallas-Fort Worth International Airport accounts for the most passenger activity, Dallas Love Field recorded a total of 1.5 million passengers in March 2025. Corporate travelers can look forward to renovations at the Kay Bailey Hutchinson Convention Center, which remains open while enhancements are being made.

Market Focus

After a decline in occupancy during the last months of 2024, Dallas-Fort Worth noted an occupancy uptick during Q1 2025. The increase can be attributed to more corporate travelers arriving in the metro than leisure travelers. The influx also boosted Dallas-Fort Worth’s ADR and RevPAR rates, increasing by 3.5% and 2.8%, respectively. For the rest of the year, the market is projected to record a slowdown in activity, with occupancy expected to remain in the 60% range and ADR only growing by 1%.

Future performance is forecast to slow down as demand and new supply will remain unbalanced. There will be more than 5,000 rooms delivered by 2027, with 3% of this supply finalizing this year. The Denton/Lewisville/McKinney submarket accounts for the greatest supply increase, with 1,504 rooms on the way.

By the Numbers

• Occupancy: 69.7%
• ADR: $135.44
• RevPAR: $94.38
• Sales Volume: $17.2M
• Under Construction: 4,091 rooms
• Sale Price/Room: $161,198

Construction

Around 2,000 rooms are expected for delivery by the end of 2025. The majority of ongoing construction is for mid-tier hotels, with upscale properties accounting for 38% of the current pipeline. These properties are sought after due to their lower costs, and they are mostly being added to northern areas of Dallas-Fort Worth.

Sales

Sales activity decreased from the $181 million peak in December 2024, recording a total $17 million in transaction volume for the first quarter. The largest sale for the first quarter occurred in March for a 73-room LaQuinta Inn & Suites in the Irving South/Grand Prairie submarket, trading for $10 million.