Because the COVID-19 pandemic, Philadelphia’s ADR has totally recovered, however occupancy and RevPAR stay beneath 2019 ranges. The first issue limiting the restoration is the stagnant business and group demand segments. Nevertheless, leisure demand has elevated, and the town is making ready to host a number of giant occasions within the coming years, supporting a constructive outlook.
The lodging market in Philadelphia is vibrant and numerous, catering to the wants of each vacationers and enterprise vacationers. Town’s wealthy historical past and big selection of points of interest draw guests all year long. Philadelphia gives quite a lot of lodging choices, from luxurious inns within the bustling metropolis middle to charming bed-and-breakfasts in historic neighborhoods.
Latest Lodge Developments & Knowledge
The next desk particulars Philadelphia’s historic and year-to-date occupancy, common price, and RevPAR. This set of knowledge consists of each impartial and branded properties throughout all chain scales.
Philadelphia Lodge Metrics
Supply: STR
The Philadelphia lodging market continues to recuperate from the height interval of COVID-19, with robust efficiency in 2022. Philadelphia’s 2022 common price stage demonstrates that ADR has totally recovered, exceeding 2019 ranges. Nevertheless, the 2022 occupancy and RevPAR ranges stay beneath the 2019 pre-pandemic ranges, illustrating {that a} restoration remains to be underway.
The first issue limiting Philadelphia inns’ full restoration is the stagnant business and group demand segments, ensuing from a big variety of workplace vacancies throughout the town. In line with Kastle’s Again to Work Barometer, the Philadelphia metropolitan space had an workplace occupancy proportion of 32.2% as of July 5, 2023, which was the second lowest among the many United States’ top-ten metropolitan areas. Officers within the metropolis imagine that workplace occupancy will improve after the summer season months, as corporations throughout the town start to offer lunch and even time-off incentives for employees to return to the workplace full-time.
Workplace Occupancy of Main Metro Areas
Supply: Kastle’s Again to Work Barometer
Demand Elements for 2022 and Past
Up to now 12 months, leisure and tourism demand elevated throughout the town, as Philadelphia’s airport lifted all COVID-19-related restrictions in early 2022. This boosted visitation at Philadelphia faculties reminiscent of St. Joseph’s College and historic venues like Independence Corridor and the Liberty Bell.
The Philadelphia Conference & Guests Bureau additionally reported a rise in occasion and conference exercise throughout the town. Reportedly, 224 occasions had been held in 2022, with roughly 513,400 lodge room nights generated from these occasions. Occasion ranges in 2022 remained beneath these of 2019 when over 300 occasions generated 1.1 million lodge room nights. However Philadelphia’s conference and occasion outlook stays constructive. Notably, 223 occasions had been booked for future years as of year-end 2022.
Moreover, Philadelphia’s sports activities groups contributed to the lodging market’s progress in 2022. That 12 months, the Philadelphia Eagles went to Tremendous Bowl LVII, the Philadelphia Phillies group took its eighth journey to the MLB World Collection, and the Philadelphia Union made its first-ever MLS Cup look.
Town’s occupancy is forecast to proceed its constructive development after robust year-to-date 2023 efficiency, particularly contemplating the town’s future occasions and developments.
New Lodge Provide and Metropolis Developments
A number of new inns opened in Philadelphia in 2021, together with the 208-room Reside! On line casino Lodge Philadelphia and the 751-room dual-branded Component by Westin and W Lodge in Middle Metropolis.
The variety of proposed lodge tasks within the metropolis has slowed considerably since late 2021, contemplating Philadelphia’s ongoing restoration and the ever-increasing rates of interest throughout the nation. More moderen lodge openings throughout Philadelphia embody the Sonder Onyx in February 2023 (an apartment-style lodge in Philadelphia’s Museum Mile) and the 127-room Lodge West & Major in October 2022, which is a part of the higher Philadelphia-Conshohocken area.
Different inns within the metropolis not too long ago underwent large-scale renovations on the finish of 2022 and in early 2023. Philadelphia’s historic Independence Park Lodge was redesigned, and the 1,408-room Philadelphia Marriott in Middle Metropolis acquired vital expertise, public area, and guestroom upgrades.
Along with current lodge openings and renovations, the town’s civic design and assessment committee reviewed roughly 90 proposed residential and business developments in 2022. A few of these developments had been accomplished inside the previous a number of months, such because the Laurel Condominium at Rittenhouse Sq. and the Morgan Lewis regulation agency headquarters in Middle Metropolis West.
Growth tasks down the pipeline embody the continued $6-billion venture on the Navy Yard, which incorporates residential buildings, business facilities, and a proposed lodge. Probably the most talked-about growth at the moment being reviewed is the proposed $1.3-billion 76 Place Enviornment in Middle Metropolis, the possible new residence of the Philadelphia 76ers. Whereas the general financial affect of the sector has but to be decided, the sort of main attraction would have a constructive affect on lodge demand in Middle Metropolis.
Trying Ahead
Philadelphia’s outlook is constructive contemplating future financial progress within the area. Moreover, the latest 2023 year-to-date developments illustrate continued enchancment for Philadelphia’s inns, with occupancy growing by 3.0% and common price rising by 7.0% over the 2022 year-to-date knowledge. The latest Philadelphia Conference & Guests Bureau statistics illustrate additional enchancment in occasion exercise, as 207 occasions have already been held within the metropolis. Philadelphia can also be making ready to host giant occasions such because the WWE’s WrestleMania 40 in 2024 and the worldwide spectacle that’s the FIFA World Cup in 2026. The occupancy progress pushed by the preparation for these occasions and the continued developments throughout the town will proceed to help Philadelphia’s restoration.
HVS is effectively knowledgeable of the developments and newest developments inside Philadelphia’s lodging market. For extra info, please contact Scott Killheffer or Michael Lambdin of our Philadelphia workplace.
Kastle Methods, “Kastle Again to Work Barometer.” June 26, 2023. Retrieved July 17, 2023.
Tom MacDonald, WHYY, “Middle Metropolis seeing extra foot visitors, however enterprise district nonetheless working to attract again workers to the workplace.” Might 13, 2023. Retrieved July 5, 2023.
PHLCVB, “Philadelphia Conference and Guests Bureau & Pennsylvania Conference Middle Authority Annual Report.” April 27, 2023. Retrieved July 5, 2023.
Chelsea Ann Ronvan, DiscoverPHL, “New Lodges in Philadelphia.” Might 19, 2023. Retrieved July 5, 2023.
Navyyard.org, “Navy Yard Plan.” December 2022. Retrieved July 5, 2023.
About Michael Lambdin
Michael Lambdin is a Consulting and Valuation Challenge Supervisor within the HVS Philadelphia workplace. He graduated from the College of Delaware in Might 2022 with a Bachelor of Science in Hospitality Enterprise Administration. Earlier than becoming a member of HVS in 2022, Michael obtained lodge and restaurant expertise with Harry’s Hospitality Group in Wilmington, Delaware, and with the College of Delaware as an Aramark Scholar. Contact Michael at (302) 377-9336 or mlambdin@hvs.com.
About Scott Killheffer
Scott Killheffer, a Senior Vice President with HVS, oversees the Philadelphia workplace. He manages and performs consulting work thorughout the Northeastern U.S. Scott earned a BS in Lodge, Restaurant, and Institutional Administration from the College of Delaware. Contact Scott at +1 (302) 897-9393 or skillheffer@hvs.com.