Thursday, March 30, 2023

HVS Report – The St. Louis Lodging Market’s Enduring Restoration

  Market Report St. Louis

The St. Louis lodging market was rising when the COVID-19 pandemic struck in March 2020 and derailed its momentum. A wholesome restoration ensued in 2021, and by year-end 2022, the town’s resort efficiency was again on observe. Though headwinds stay, the outlook is optimistic, as investments all through St. Louis are paving the way in which for energy within the resort market.


Latest and Projected Resort Efficiency

Just like the remainder of the nation, resort metrics in St. Louis plummeted in 2020 on the onset of the COVID-19 pandemic, however the market had entered a wholesome restoration part by the spring of 2021. Progress accelerated by the rest of the 12 months, fueled by a surge of leisure journey and the sluggish reemergence of economic demand, in addition to the return of conventions and main occasions.

Demand continued to enhance in 2022, as company workers step by step returned to places of work and attendance at giant conventions and occasions elevated. Rising labor prices and the shift in journey patterns, as leisure demand quickly elevated and industrial journey was slower to get better, brought about hoteliers to aggressively push price progress. In consequence, ADR strengthened robustly in 2022, surpassing the pre-pandemic excessive by over 10%. Though occupancy has continued to path pre-pandemic efficiency, RevPAR for 2022 almost reached the 2019 stage.

As illustrated under, we anticipate these optimistic developments to proceed.

Historic and Forecasted Metrics—St. Louis Market

Supply: STR (Historic), HVS (Forecast)

Demand and ADR Progress Drivers

A variety of components and improvement tasks throughout St. Louis ought to increase resort demand and bolster pricing energy within the coming years, as outlined under.

  • The Nationwide Geospatial-Intelligence Company is setting up a brand new $1.7-billion, 97-acre campus, which is anticipated to be absolutely operational in north St. Louis by 2026. Though the company just isn’t new to the area, the brand new campus is anticipated to be accompanied by further analysis and enterprise partnerships with personal firms and native establishments.
  • The St. Louis space is a middle for analysis and improvement within the bio- and life-science sectors, anchored by the native operations of firms reminiscent of Bayer Crop Science, Pfizer, and Mallinckrodt, in addition to the Donald Danforth Plant Science Heart. Continued progress inside this sector might be supported by additional improvement at two innovation districts: the 600-acre 39 North in suburban Creve Coeur and the 200-acre Cortex within the metropolis’s Midtown neighborhood.
  • The America’s Heart Conference Advanced is presently present process an enlargement that can replace the power, add new occasion area, and permit for faster turnover between occasions. The venture broke floor in 2022 and is anticipated to be accomplished by early 2024.
  • The 2023 season would be the inaugural season for the town’s new Main League Soccer (MLS) franchise, the St. Louis Metropolis SC. The staff will play on the brand-new, 22,500-seat CITYPARK stadium positioned close to the just lately renovated St. Louis Union Station.
  • Simply earlier than the pandemic, within the fall of 2019, the St. Louis Aquarium and St. Louis Wheel opened at Union Station. On the different finish of Downtown, the St. Louis Gateway Arch concluded a $380-million renovation in 2018 that added new interactive reveals. COVID-19 restrictions impeded the preliminary ramp-up of those points of interest, however they helped draw robust visitation to the market in 2021 and 2022.
  • Outdoors of Downtown, a $230-million, 425-acre enlargement of the St. Louis Zoo is underway. Upon completion in 2027, the brand new WildCare Park will supply guests a one-of-a sort immersive safari expertise that includes quite a lot of big-game species in a pure park-like habitat.
  • On the western outskirts of the St. Louis metro space, The Hoffmann Household of Firms invested roughly $150 million in 2021/22 on preliminary acquisitions geared toward remodeling the Missouri River Valley into a world wine-tourism vacation spot.

Resort Growth

The higher St. Louis market skilled a revitalization of its resort provide over the previous twenty years because of comparatively low-cost debt and solely average will increase in building prices. Moreover, quite a few adaptive-reuse tasks in St. Louis had been supported by beneficiant improvement subsidies and an ample inventory of under-utilized historic buildings.

Nevertheless, these market circumstances have modified since 2020. The pandemic dramatically slowed the resort building pipeline, and the next will increase in improvement and capital prices have restricted the variety of new resort tasks. Though choose tasks will nonetheless transfer ahead, price constraints are proving to be a excessive hurdle that can forestall all however the strongest tasks from coming to fruition.

Moreover, in 2022, the Metropolis of St. Louis applied a brand new framework for evaluating improvement tasks that can make it far more troublesome for resort tasks to obtain tax abatements, tax increment financing (TIF), and different subsidies.

Given these components, will increase within the area’s resort provide are anticipated to be extra modest within the coming years than within the current previous. The next tables illustrate the breakdown of recent resort tasks we’re presently monitoring, in addition to anticipated ranges of provide progress for the following few years.

Resort Rooms in Growth inside St. Louis

Supply: HVS
Provide Progress in St. Louis

Supply: STR (Historic), HVS (Forecast)

Efficiency and Funding Outlook

Though new resort improvement is anticipated to face challenges in coming years, the lowered improvement pipeline mixed with the aforementioned investments within the regional economic system bode nicely for the efficiency of current belongings. Our expectations for the St. Louis resort market are as follows:

  • Additional occupancy restoration as strengthening leisure and group demand compensates for the lingering pandemic impression on enterprise journey
  • Regular ADR progress protecting tempo with, or modestly exceeding, inflation
  • A multi-year interval of wholesome RevPAR positive aspects

The strong provide and demand fundamentals outlined above ought to pave the way in which for each stronger operational efficiency and lowered volatility threat. For quite a lot of years, funding in St. Louis-area motels has been dominated by regional builders and entrepreneurial homeowners, with solely restricted curiosity from personal fairness and institutional buyers. St. Louis resort buyers who persevered by the trials of 2020 and the following restoration are actually comparatively nicely positioned given the favorable market outlook. Moreover, the present market dynamics ought to assist entice funding to the realm from beforehand untapped capital sources.

For extra data, contact our St. Louis market specialists, Daniel McCoy and Benjamin Giebler.

About Daniel P. McCoy

Because the HVS Follow Chief for the Midwest, Dan McCoy, MAI, oversees the agency’s seven places of work on this area. A Senior Managing Director at HVS, Dan is a acknowledged thought-leader, collaborative advisor, and invaluable useful resource for the Midwest’s lodging business. He combines a deep understanding of regional resort markets with robust analytical pondering to offer all kinds of purchasers with up-to-date hospitality intelligence and tailored options. Dan is a Designated Member of the Appraisal Institute (MAI) and an authorized normal appraiser. Contact Dan at +1 (970) 215-0620 or

About Benjamin Giebler

Benjamin Giebler is a Undertaking Supervisor with the St. Louis HVS consulting and valuation observe. Benjamin obtained his Missouri Actual Property License in 2018 and Kansas Actual Property License in 2020 and labored as a industrial actual property agent in Kansas Metropolis. His expertise within the hospitality business consists of working as a valet and bell supervisor on the Marriott Downtown Kansas Metropolis, and he was a part of the opening staff at Resort Kansas Metropolis as a entrance workplace and bell supervisor. He graduated from the College of Missouri-Kansas Metropolis with a Bachelor of Science in Enterprise Administration with an emphasis in Actual Property and Finance. Moreover, he earned a certificates in Hospitality Actual Property Investments and Asset Administration from Cornell College. Contact Benjamin at (816) 589-0922 or

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