Colorado Hospitality Market Report
Market Overview
The Colorado hospitality market is thriving, with aerospace and tourism playing pivotal roles. With the nation’s second-largest aerospace economy, boasting over 400 prominent companies, Colorado demonstrates its economic prowess. The market’s appeal is further fortified by ongoing investments in infrastructure. These investments not only bolster economic expansion but also enhance the state’s allure for both visitors and residents alike, positioning Colorado as a thriving and multifaceted hospitality market.
This hospitality report includes data and highlights from the following markets and submarkets:
- Denver
- Boulder & Longmont
- Colorado Springs
- Fort Collins
Highlights
- Several new hotel brands are entering the Denver market, spanning various classes and submarkets.
- Hotel occupancy in Boulder & Longmont has increased by 3.9% in the past 12 months to a current rate of 77.6%.
- Colorado Springs is among the few U.S. hospitality markets with both an above-average proportion of Economy and Midscale units and an above-average proportion of Upper Upscale and Luxury rooms.
- All hospitality construction in Fort Collins is concentrated in the Economy and Midscale class sector.
Denver
By the Numbers, Last 12 Months
Source: CoStar Group
- Occupancy: 69.2%
- ADR: $147.52
- RevPAR: $102.01
- Supply SF: 21.3M
- Demand SF: 14.7M
Market Overview
Denver is an attractive destination for visitors and new residents due to a highly educated workforce, a diverse economy with business expansions and relocations, cultural attractions, and city-wide events supported by the Colorado Convention Center. Conferences, sports events, and some corporate travel have boosted weekday hospitality performance. ADR performance is reaching historic highs; however, rising interest rates have made funding new construction projects more challenging.
Market Performance
The average ADR in Denver has increased by 7.8% over the last 12 months, and RevPAR has increased by 12.7%, indicating strong performance in the hospitality market. The average 12-month occupancy rate has only reached 69.2% and is not expected to fully recover until 2026. There are approximately 17 hotel properties encompassing about 2,100 rooms currently under construction in Denver, which represents a 3.6% increase in inventory, and 397 hospitality properties have been delivered in the past 12 months. A majority of the sales this year were small lower-tier class hotels, merger-related, or recapitalization. In February, Continuum Partners sold an interest in the 200-room Kimpton Born to Aspen Hospitality for $150.6 million, which set a record for the highest price per key in Denver’s market history at $753,000 per key.
Boulder & Longmont
By the Numbers, Last 12 Months
Source: CoStar Group
- Occupancy: 64.7%
- ADR: $178.59
- RevPAR: $115.61
- Supply SF: 1.5M
- Demand SF: 1M
Market Overview
Boulder & Longmont is considered one of the smaller submarkets in the Colorado hospitality industry. It consists of around 4,300 hotel rooms distributed among 50 properties. The average hotel size in this submarket is around 85 rooms, which is slightly above the market average of 61 rooms per building. The submarket has not recorded any hotel trades in the past 12 months.
Market Performance
The Boulder & Longmont hospitality submarket has been experiencing strong growth in RevPAR, with a positive 12-month average RevPAR and an annual growth rate of 9.2%. This growth rate is higher than the 5.2% increase observed in the broader Colorado Area market. There are currently two projects underway in the submarket, comprising approximately 439 rooms. This represents a reversal of the overall trend, as the submarket has seen inventory contraction over the past five years, primarily due to demolition activities outpacing new construction.
Colorado Springs
By the Numbers, Last 12 Months
Source: CoStar Group
- Occupancy: 64.7%
- ADR: $145.29
- RevPAR: $93.96
- Supply SF: 4.9M
- Demand SF: 1M
Market Overview
Employment in the Colorado Springs market has been on an upward trajectory, with a solid year-over-year growth rate of 2.1%. This growth equates to an increase of around 6,500 jobs. The Colorado Springs hotel market boasts a diverse range of hotel types, catering to various traveler preferences. It includes hotels at both the high-end and cost-efficient ends of the spectrum. It comprises approximately 14,000 hotel rooms distributed among 170 properties.
Market Performance
The average ADR in Colorado Springs is currently $145.29, and the average RevPAR is $93.96. The Colorado Springs hospitality market is experiencing a robust construction pipeline, with 791 rooms currently under construction. This represents a significant 5.8% expansion of the existing inventory. Additionally, 275 rooms have been delivered in the last 12 months. Over the past year, Colorado Springs has recorded 10 hotel trades.
Fort Collins
By the Numbers, Last 12 Months
Source: CoStar Group
- Occupancy: 61.8%
- ADR: $124.25
- RevPAR: $76.81
- Supply SF: 1.2M
- Demand SF: 714.4K
Market Overview
The Fort Collins hospitality submarket comprises around 3,200 rooms spread across 36 properties. The average hotel in the Fort Collins Area contains 88 rooms, which is notably above the market average of 61 rooms per building. The submarket has demonstrated resilience in its recovery from the impact of the COVID-19 pandemic and has seen an increase in RevPAR, while construction activity has picked up recently. However, hotel trades have been relatively limited in this submarket.
Market Performance
In the past 12 months, monthly occupancy in the Fort Collins submarket has averaged 61.8%, slightly above the market average of 60.4%. As of August, the 12-month average has been on an upward trajectory, growing at an annual rate of 9.7%, exceeding the 5.2% growth rate of the broader Colorado Area market. Currently, there is one hotel project underway featuring 122 rooms. This represents the highest number of rooms under construction in the region in the past five years.
