Jacksonville, Fort Lauderdale, and Orlando, FL Hospitality Market Report

Market Overview

The hospitality market in Florida is thriving, making it one of the most sought-after destinations for travelers and tourists. With its world-famous theme parks, stunning beaches, and a wide range of attractions, Florida offers a diverse and vibrant hospitality scene. The hospitality sector also plays a vital role in the state’s overall employment, with the leisure and hospitality industry accounting for a substantial portion of jobs. The continuous development and investment in the sector and the state’s marketing efforts have positioned Florida as a top-tier travel destination for both domestic and international tourists.

Orlando, home to renowned theme parks like Walt Disney World and Universal Orlando Resort, has been a key driver of the state’s hospitality market. These attractions attract millions of visitors each year, contributing to the region’s economic well-being. Additionally, Orlando’s bustling convention center, international airport, and proximity to Port Canaveral make it a hub for business travelers and cruise enthusiasts. While Orlando is a major driver of Florida’s economic prosperity, Fort Lauderdale also plays a significant role. It is the state’s second most populous county with the second largest labor force. Fort Lauderdale benefits from its beautiful beaches, the Broward County Convention Center, and Port Everglades, the world’s third busiest cruise port. The Fort Lauderdale-Hollywood International Airport, the state’s third busiest airport, serves as an important gateway for the local hospitality and business industries.

Jacksonville, another prominent city in Florida, boasts a significant number of hotels and properties. Its strategic location and proximity to the Atlantic Ocean make it an attractive destination for leisure and business travelers. With over 300 hotel properties in the area, Jacksonville is an integral part of the overall Florida Hospitality Market. Currently, 14 properties are undergoing construction, indicating ongoing development and increased supply.

Performance

Orlando, Fort Lauderdale, and Jacksonville each possess distinctive qualities that contribute significantly to Florida’s overall economy, particularly in the hospitality sector. Though each market expects a slight slowdown in activity in response to economic outlook concerns, they have all been performing well in H1 2023.

According to CoStar Group, Orlando’s hotel industry posted strong year-to-date performance through May 2023. The RevPAR showed a significant increase of 15 percent compared to the same period in 2022. This growth can be attributed to a nine percent rise in ADR and a five percent increase in occupancy rates.

Fort Lauderdale’s hotel sector maintains a positive performance, although the growth rate has decelerated following two years of significant progress. The RevPAR showed a six percent increase through April 2023 compared to April 2022. This increase was primarily driven by a five percent rise in ADR and a one percent increase in occupancy.

In Q1 2023, Jacksonville’s hotel KPIs demonstrated strong growth. The RevPAR increased by approximately 13 percent compared to Q1 2022. This growth can be attributed to a nine percent rise in ADR and a four percent increase in occupancy rates.

Construction

Orlando currently has 19 properties totaling 3,901 rooms under construction, making up 2.8 percent of inventory. The largest property under construction is the Epic Universe Hotel, with 500 rooms and five stories tall. The Epic Universe Hotel is set to be completed in July 2025.

Fort Lauderdale has a significant number of hotel properties currently under construction, totaling 1,295 rooms. This accounts for approximately 3.4 percent of the existing supply in the market. The Upper Upscale Omni Hotel Fort Lauderdale contributes to more than half of the rooms under construction in Fort Lauderdale. This hotel, located in the Fort Lauderdale Beach Submarket, will consist of 800 rooms. It will be conveniently situated adjacent to the Greater Fort Lauderdale/Broward County Convention Center, which is currently undergoing expansion. The Omni Hotel is scheduled to open in early 2026 and will be owned by the Broward County government.

Jacksonville currently has 14 properties totaling 1,446 rooms under construction. This accounts for about 4.8 percent of the market’s inventory. The Cambria Hotels Jacksonville Towne Center is the largest property under construction, with 132 rooms, and is set to complete in November 2023.

Sales

In Orlando, the average sale price per key since the beginning of 2022 has been approximately $99,000, with nearly 60 percent of the transactions involving Economy and Extended Stay properties. However, recent sales have included two Upscale properties that were sold at prices higher than the market average.

The primary highlight in Fort Lauderdale during Q1 2023 was the transaction of the Diplomat Beach Resort, which consists of 1,000 rooms. This Upper Upscale resort was sold for a total of $835 million, equivalent to $835,000 per key.

The trading activity in Jacksonville has been exceptionally high in the past two years, surpassing the market’s average. This heightened level of activity can be attributed to the strong RevPAR growth experienced in Jacksonville since 2020. The robust performance in RevPAR has translated into increased sales activity and rising prices per room in the market, reflecting its strength among the top hotel markets.

Orlando By the Numbers

• Sales Comparables: 31
• Average Price Per Room: $107K
• Average Price: $15.2M
• Average Cap Rate: 8.7%

Fort Lauderdale By the Numbers

• Sales Comparables: 33
• Average Price Per Room: $416K
• Average Price: $46.9M
• Average Cap Rate: 7.5%

Jacksonville By the Numbers

• Sales Comparables: 25
• Average Price Per Room: $158K
• Average Price: $19.3M
• Average Cap Rate: 9.7%

Conclusion

Despite increased interest rates, recessionary headwinds, and volatile market conditions, Florida’s hospitality industry has managed to have positive returns. Florida remains a highly favorable destination for the hospitality industry, thanks to its stunning white sand beaches, world-renowned theme parks, thriving dining scene, and unique shopping opportunities. The cities within the state exemplify Florida’s consistent growth and resilience, making it an attractive choice for hoteliers.