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Seattle Lodge Market: A Shining Beacon of the Pacific Northwest  Â
In 2023, Seattle was a beacon of renewed energy within the Pacific Northwest given its vibrant live performance and sports activities occasion calendar, record-breaking cruise season, and $1.9-billion enlargement of the Seattle Conference Middle. Because of these components, Seattle was one of many nation’s best-performing lodge markets in the course of the summer season.
A key driver of Seattle’s leisure demand is its cruise business. In 2023, the variety of Alaska cruises reached 291, a report quantity in comparison with 213 in 2019. The Port of Seattle estimates the annual influence of a cruise season on the area at $900 million. This demand notably advantages native inns, as passengers sometimes keep in a single day in Seattle earlier than and/or after their journey.
Whereas downtown lodge occupancy for 2023 didn’t attain the low 80s of year-end 2019, the restoration trajectory stays constructive, supported by comparatively sturdy progress in 2023. From June by way of September, occupancy ranges trended within the low-to-mid 80s as main live shows by artists similar to Taylor Swift, Beyoncé, Coldplay, Ed Sheeran, and George Strait drew important crowds to Seattle. Downtown ADR elevated reasonably in 2023, largely attributed to a robust first quarter, adopted by softer progress for the rest of the yr because of the nationwide financial atmosphere and decreased discretionary spending.
The town efficiently hosted an estimated 100,000 attendees in the course of the MLB All-Star Week Midsummer Basic in 2023 and roughly 40,000 attendees on the NHL Winter Basic at T-Cell Park on New Yr’s Day in 2024. Each occasions emphasised the town’s potential to accommodate main sports activities video games. Trying ahead, Seattle will host a number of matches of the 2026 FIFA World Cup collection.
Company demand restoration continues to be influenced by Downtown Seattle workplace vacancies. In keeping with market individuals, Amazon is predicted to generate 290,000 room nights in 2024, which is approaching the height of 335,000 room nights in 2019. Starting in Could 2023, Amazon mandated that workers work from the workplace at the very least three days per week, and a full-time return to workplace is predicted in early 2024. Meta, one other main tech employer within the area, presently has an identical in-office mandate of three days per week.
In January 2023, the $1.9-billion Summit constructing was accomplished as a 573,770-square-foot enlargement of Seattle Conference Middle (SCC), almost doubling the middle’s occasion capability and placing it into the class of conference facilities with one million-plus sq. toes of exhibit area. The enlargement permits SCC to compete extra successfully for giant nationwide conventions towards aggressive amenities in San Diego, San Francisco, Las Vegas, and Anaheim. Whereas the variety of occasions for 2023 exceeded historic ranges, attendance ranges have been muted comparatively. The 2024 reserving tempo suggests a constructive outlook for 2024, notably as Microsoft plans to host all future occasions in Seattle—a serious upside for SCC.
Notable lodge renovations in 2023 embody upgrades to the premier suites and assembly area on the 4 Seasons Lodge; a $25-million renovation on the Fairmont Olympic, which is celebrating its a centesimal anniversary in 2024; and a multimillion-dollar renovation at Lodge 1000, together with the addition of a brand new cocktail bar. By way of lodge openings, the 265-room Astra Lodge, a Tribute Portfolio Lodge, opened in South Lake Union in 2023. New provide to observe in 2024 contains the 120-room boutique Lodge Westland (fall of 2024), a 175-room AC by Marriott in South Lake Union, and the extremely anticipated, 251-room InterContinental Bellevue at The Avenue in Bellevue. This luxurious property is predicted to turn into IHG’s West Coast flagship lodge.
Noteworthy lodge transactions in 2023 included the sale of the Residence Inn by Marriott Seattle South/Renton ($380,137 per key) in October, in addition to Pebblebrook Lodge Belief’s sale of the Kimpton Lodge Classic ($33.7 million at $269,600 per key) and the Kimpton Lodge Monaco ($63.25 million at $334,656 per key) in Could. Pacifica Inns, the client of Lodge Classic, plans to conduct an intensive guestroom and public-area renovation, with a relaunch of the lodge anticipated by finish of 2024. InnVest, the client of the Lodge Monaco, plans to reposition this property with a complete renovation. With greater than ten CMBS loans secured by inns coming due within the subsequent two years within the Seattle metropolitan space, lodge traders are intently watching this market. Nonetheless, regardless of Pebblebrook Lodge Belief’s exit from Seattle, the current acquisitions additionally point out a robust urge for food for the Seattle market and religion in its continued restoration.
The approaching yr is predicted to be boosted by a strong cruise season, larger foot-traffic ranges in Downtown Seattle, a constructive reserving tempo on the SCC, and a vibrant lineup of occasions, with headliners similar to Madonna and Tim McGraw. Moreover, a extra significant return of worldwide journey is predicted as a consequence of new flight routes introduced for 2024, similar to Delta’s direct path to Taiwan in June 2024; Lufthansa’s nonstop route enlargement to Munich, Germany, by Could 2024; and the seasonal Alaska Airways path to Nassau, Bahamas, from December 2023 by way of April 2024. The opening of the Ocean Pavilion on the Seattle Aquarium this summer season ought to additional increase leisure journey downtown. Going ahead, the deliberate 2025 completion of the Seattle Waterfront Park connecting Downtown/Pike Place Market with the Waterfront promenade is predicted to bolster leisure demand as nicely.
Regardless of the lagging restoration of the company demand base, Seattle’s sturdy leisure and group demand dynamics, important investments coming to fruition, and considerably restricted new provide pipeline herald a vibrant future for Seattle’s downtown inns.
Sources:
RCA, King County Assessor, and regional lodge brokers
https://www.bizjournals.com/seattle/information/2023/06/27/seattle-hotel-occupancy-june.html
https://www.portseattle.org/information/port-seattle-completes-record-setting-2023-cruise-season
https://downtownseattle.org/programs-services/analysis/economic-recovery/
https://www.travelagentcentral.com/inns/seattles-hotel-andra-unveils-multimillion-dollar-reno
About Eileen Bosworth
Eileen Bosworth, a Director with the HVS Portland workplace, has been constructing on her worldwide hospitality gross sales and operations expertise to ship limited-service to select-service lodge value determinations, market research, and feasibility research at HVS since October 2018. Moreover specializing in rural markets in Oregon, Eileen’s experience extends to Idaho, notably the higher Boise space, and jap Washington State. For extra data, contact Eileen at ebosworth@hvs.com or (970) 420-7161.
