Tampa Hospitality Market Report
Tampa Market Overview
The Tampa hospitality market has experienced a decline in RevPAR, driven by decreased demand and inventory growth, alongside a decrease in sales from higher rates and strict lending standards. Despite these challenges, growth from Tampa’s key demand generators, including city-wide conventions, passenger traffic, and sporting events, will partly compensate for the economic headwinds. Meanwhile, group demand is primarily supported by The Tampa Convention Center, which completed a $44.5 million Capital Improvement Plan in late 2023, its largest renovation project in history.
Tampa Market Performance
Tampa’s hotels saw a 2.4% decline in RevPAR during H1 2024. This decline was driven by lower demand and inventory growth, pushing occupancy down 1.6% in H1 2024. The negative RevPAR is expected to reverse in Q3 2024, with inflationary growth expected in Q4 2024 at 4%. However, the growth in H2 2024 is not expected to fully offset the slow start to the year, leaving ADR down 0.4% for the year.
The first three months of 2024 played a vital role in the decline in RevPAR. The decline was driven by a combined increase in supply of 1.0% and a decrease in demand of 3.2%, pushing occupancy to decline by 4.1% in Q1 2024.
Tampa By the Numbers
- Occupancy: 69%
- RevPAR: $117.12
- ADR: $169.68
Last 12 Months | Source: CoStar Group
Construction
Tampa currently has 10 hotels and 1,255 rooms under construction, representing 2.3% of the existing inventory. Half of these are expected to open in 2024. An additional 2,716 rooms are in final planning, or 5.1% of the inventory.
Sales
Sales volume in Tampa has decreased in 2024, with $55 million in H1 2024. This steep decline is mainly due to challenges related to high interest rates and stricter lending standards. Most trades in H1 2024 involved upscale and upper-midscale properties. A notable transaction involved the acquisition of the 128-room upscale Courtyard Tampa Northwest/Veterans Expressway for 23.8 million ($186,000/key).
Despite the expected increase in distressed sales due to the cost of refinancing maturing loans at current interest rates, there have been few signs of distress in the market. There are currently 41 CMBS loans maturing by December 2025 with a Tampa hotel as collateral.
