2024 Dallas Hospitality Market Report
Key Findings
- Dallas is in the top three markets for the highest number of rooms under construction nationally, with over 5,000 rooms on the way.
- Despite ongoing construction, Dallas recorded ADR growth of 3.4% over 2024.
- Construction is ongoing for the Universal Theme Park, which will draw many visitors upon its expected completion in 2026.
Dallas Demographics
- Unemployment Rate: 4.0%
- Current Population
- Households: 2,112,333
- Median Household Income: $88,274
Dallas is a standout market for domestic and international visitors as its two airports, Dallas-Fort Worth International Airport and Dallas Love Field, have flights to many destinations. Together, both airports record an average passenger count of over 60 million. Several companies have also relocated to Dallas. One of its most recent additions is the relocation of Toyota’s sales, engineering, and financial services departments to the metro, which added 4,000 jobs.
Market Performance
Throughout 2024, Dallas hospitality properties noted a change in occupancy performance. The sector recorded strong occupancy levels in the first half of the year, but this trend began to slow throughout the second half. One factor that contributed to the decline in performance is the slowdown in group occupancy. Group travel dropped for eight consecutive months, which slowed occupancy down by -2% at the end of December 2024.
Looking forward, Dallas is forecast to note positive performance trends in upcoming years. Its outlying submarkets are expected to make up the most activity; specifically, West Plano/Frisco and Denton/Lewisville/McKinney are leading the way for the metro’s hotel growth. Many attractions are located here, such as the Omni PGA Frisco Resort, which brings in visitors for its golf courses.
By the Numbers
- Occupancy: 64.8%
- ADR: $128.38
- RevPAR: $83.20
- Sales Volume: $233M
- Under Construction: 5,078 rooms
- Sale Price/Room: $159,008
Construction
Hotel developments decreased in Dallas throughout 2024, but almost half of the 5,078 rooms on the way are expected to be delivered by year-end 2025. The northern submarkets are recording the most activity as Denton/Lewisville/McKinney makes up 53% of the incoming supply. Additionally, most of the construction pipeline across Dallas is made up of mid-tier hotels.
Sales
Transactions for Dallas hotels have also declined, with $233 million in sales activity throughout 2024. The Dallas South/East submarket made up the majority of trades as many midscale and economy hotels are located here. With recent rate cut announcements, sales are expected to rise in 2025.
