Midwest Hospitality Market Report
Chicago
Market Overview
The return to corporate travel has greatly aided Midwest hospitality market Chicago as hotel performance levels have been boosted by business and group travel. Many large events are also scheduled for the rest of the year, which has led to a forecast of RevPAR increasing by 4%. The next prominent event that Chicago will host is the Democratic National Convention in August.
Market Performance
Chicago has noted a 12-month occupancy rate of 63.7%, which is a bit ahead of the national occupancy average that stands at 62.8%. Group occupancy in the metro makes up about a quarter of the total occupancy here. The ADR in Chicago hasn’t moved much, but Chicago’s CBD boasts the highest 12-month average occupancy, ADR, and RevPAR out of all the Chicago submarkets. The CBD notes an ADR that is about $100 greater than the next highest ADR submarket due to its cluster of luxury-tier hotels.
Construction and Sales
Chicago currently has 10 hotels under construction that total to 1,005 rooms. The majority of hotels underway are located in Chicago’s CBD. Half of the rooms under construction are Upscale properties, with the largest Upscale hotel delivering 140 rooms upon completion in 2026.
Hotel sales volume throughout the past 12 months here totaled to $368 million. The largest sale so far this year was the Canopy by Hilton, located in the Central Loop. This is an Upper Upscale property with 215 rooms that sold for $25.6 million, or $119,090 per room.
Columbus
Market Overview
There are 310 hotel properties located in Columbus, which adds up to 33,000 rooms. Buildings here average around 106 rooms, while the U.S. average is 88 rooms in each hotel. Employment metrics stand out here with a boost of 12,000 jobs. A majority of this increase was noted in the leisure and hospitality segment, aiding hotel performance in Columbus.
Market Performance
Occupancy in Columbus, at 60.7%, is near the U.S. average for the trailing 12 months. Upscale and Upper Midscale have noted the greatest 12-month occupancy change out of the other hotel sectors at 63.1%. However, RevPAR metrics have stood out here for the past 12-month period. RevPAR in Columbus climbed by 4.7%, which is greater than the 1.5% increase that was observed nationally.
Construction and Sales
Most hotels being delivered are in the Upper Midscale segment. There are 807 rooms under construction in the metro, with 328 rooms belonging to Upper Midscale. Upon completion in December, Home2 Suites by Hilton will deliver 117 Upper Midscale rooms to eastern Columbus.
There have been 10 hotel trades here over the past year. The largest sale was an Upscale property that sold for $12.4 million in June.
Detroit
Market Overview
Detroit’s employment metrics have noted a gain of 9,600 jobs, which is around 0.5%. Although this is still a positive for the metro, it is a slowdown from previous employment gains that were around 1.8%. The hotel market in Detroit has 487 properties, which equals 48,000 rooms. An average hotel here has near 99 rooms, which is close to the national average of 88 rooms.
Market Performance
Over the last 12 months, occupancy here has noted a level of 58.8%, which is behind the national average of 62.8%. Occupancy metrics in Detroit have been highest in Upscale and Upper Midscale properties at 59.6%. The RevPAR measure has climbed by 2.5% annually. It currently stands at a 12-month average of $72.09.
Construction and Sales
The Detroit metro is seeing lots of development in its construction. There are 14 properties underway that add up to 2,691 rooms. Inventory here will boost by 5.6% upon completion.
Throughout the 12-month period, there were about 20 sales in Detroit. Several properties that are above Midscale traded here. The most significant sale occurred in March for a Troy Inn & Suites property that sold for $15.5 million.
Indianapolis
Market Overview
The hotel market in Indianapolis boasts around 350 properties that make up a total of 37,000 rooms. Over 20% of the rooms here are in the higher-tier segment, which stands out from other hotel markets in the country. Employment metrics are also seeing an uptick in the Indianapolis metro. The market has noted a boost of 24,000 jobs, which totals to an increase of 2.1%.
Market Performance
Occupancy in Indianapolis is currently at 71.3%. This is a slight boost from the 12-month average occupancy rate of 61.8%. The RevPAR rate saw an uptick throughout the past 12 months, and it is now at $103.08. This metric increased by an annual rate of 8.4%, which is much higher than the 1.5% increase observed on a national level.
Construction and Sales
There are currently 14 properties underway that will deliver 1,479 rooms to the metro. This will provide a significant increase to Indianapolis as the percent of inventory will grow by 4.0%. Eight of these properties are scheduled for delivery in the second half of this year.
Indianapolis has seen 13 hotels trade over the past 12-month period. While this is a bit lower than the average number of trades seen historically, the sales added up to a total of $5.5 million here.
Milwaukee
Market Overview
There are about 20,000 rooms in Milwaukee’s hotel market that make up 149 properties. Hotels here have about 105 rooms on average, which is close to the national average of 88 rooms. Milwaukee has around 20% of its rooms in the Luxury or Upper Upscale categories. This segment makes up the highest occupancy rate here at 59.5% for the past 12-month period.
Market Performance
Current occupancy in Milwaukee is at 69.5%, which is above the 12-month average of 55.5%. The 12-month RevPAR here is at $72.16, an improvement from the historical average in the metro. ADR here has also noted positivity as it climbed from the historical metric to $145.69.
Construction and Sales
Six properties are undergoing construction in Milwaukee, which all add 585 rooms here. More than half of the hotels underway are Upscale properties. The largest Upscale property under delivery is a Staybridge Suites that will deliver 135 rooms to the area.
There have only been eight sales over the past 12 months here, which puts Milwaukee in some of the less actively traded markets nationally. However, the largest sale so far this year is an Upscale property, which will continue to increase occupancy in this class segment. The 132-room Cambria Hotel in Downtown Milwaukee was sold for $11.1 million in January.
