11.5 million hotel room nights were booked in Nashville last year and we’re on track for even more visitors this year.
Around 25 new hotels are expected to open this year in Davidson County, according to STR, the travel research company for the U.S. hotel industry.
“We currently have 380 hotels or so that exist. And we have 115 in the pipeline. Not all of those are going to open obviously next year. They’re in various planning stages. Some of them have just broken ground, some of them have just gotten financing, so there’s a whole host of properties that are, as you can tell by the cranes, currently under construction, and that number for this year is probably going to be in the 25 range, 25 to 30 or so,” said Jan Freitag, Senior Vice President of Lodging at STR.
The majority of these hotels will be chain affiliated. And Freitag believes there is a need for more hotel rooms in Nashville.
He said, “We’re selling a lot of rooms. Why is that? Because we have a lot of rooms. So, we’re adding more hotels every year. So, the year 2000 we had 266 hotels, today we have 379 hotels, with roughly 44,000 rooms.”
There was one night in 2017 when more than one million rooms were sold in Nashville. In 2018, there were six nights where more than a million rooms were occupied. We’re told Nashville hotel room growth is growing at ‘three times’ the pace of the U-S.
Right now, occupancy is very high.
“This is the average occupancy by day. And what you’re seeing is like, wow! We’re really full Tuesday and Wednesday with the business travelers in town. We’re selling 76-percent of all rooms, 75.7-percent of all rooms, but on the weekends, we’re really full. Selling 8 out of 10 rooms, on average every Saturday for 12 months in a row,” Freitag told News 2.
That means there’s pricing power in the market, so room rates are going up by roughly 3-percent. But when all the new hotels are built, that very well could drive prices down.
But there is a problem with all of these new hotels. Freitag says we need more public transportation options, and affordable workforce housing close to where the jobs are.
“I have no doubt that we can plan hotels, finance hotels, and build hotels. I really wonder, who’s going to clean hotels? I think access to labor is going to be the one governor of this hotel boom. I don’t doubt that there’s money available, Nashville is as hot as it gets. I present to finance groups and development groups all across the nation and everybody wants to talk to me about Nashville. Not just because I live here, but because we’re hot. Nashville is one of the hottest markets in the nation. But I’m wondering, if we don’t get workforce housing, workforce development and workforce access under control or at least figure it out, this is going to be really really hard to staff all those hotels and I always say clean the rooms and check people in and out,” he explained.
Freitag said that one thing that’s interesting to him is that typically, in the top 25 markets, weekday rates are higher than weekend rates, but that’s flipped in Nashville because our leisure brand is so strong, hotel managers feel they can charge more for weekend stays because people are coming anyway.
News 2 is reporting on Nashville’s historic growth and the growing pains that come with it. Click here for more Nashville 2019 reports.