Nashville Hospitality Market Report
Market Overview
Nashville is a favored spot for leisure travelers, boasting live music venues, a rich musical heritage, and a variety of festivals, conventions, and sporting events. In the past decade, its culinary scene has gained prominence, particularly for Southern cuisine, barbecue, and Nashville Hot Chicken.
A major highlight in Nashville is the CMA Fest, a country music festival held in June that draws tens of thousands of visitors for nearly a week. Other notable annual events in the city include the Academy of Country Music (ACM) Awards, the Dove Awards for Christian and Gospel Music, and the CMA Music Awards.
Market Performance
Nashville remains one of the leading hotel markets in the southern region, with a 3.4% increase in RevPAR from April of 2023 to now. While the strong RevPAR growth that marked early 2023 has eased, the area continues to show robust performance thanks to high demand for the Music City Center and a steady flow of weekend visitors.
Recent hotel openings have predominantly been mid-tier, unlike in 2022, when high-end additions like the Four Seasons Hotel boosted new inventory and raised ADR. Although Q4 2023 occupancy rates were slightly below 2019 levels, this is attributed to increased supply rather than diminished demand, which has actually surpassed 2019 figures. Since 2019, there has been a supply increase of over 20%. However, the outlook for 2024 is less optimistic, with RevPAR growth expected to remain flat compared to 2023.
Construction
At present, 21 properties comprising approximately 2,700 rooms are under construction in Nashville, with expected opening dates through 2026. This represents 4.6% of the existing supply, significantly higher than the national average of 2.7%, and is among the highest in STR’s Top 25 markets.
Sales
Five hotels have been sold in the Nashville hospitality market in 2024. The majority of these transactions were primarily limited to midscale, limited-service hotels. However, Host Hotels & Resorts acquired two upper-tier Nashville properties, the 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown, for $530 million. This all-cash deal has a capitalization rate of around 7.4% based on the Year 1 pro forma at a collective price of $735,000 per key. The sellers are Starwood Capital Group, Crescent Real Estate, and High Street Real Estate Partners. These two hotels, which share amenities and have a combined total of 721 rooms, are located in Nashville’s Lower Broadway entertainment district within the Nashville CBD submarket.
