Nashville hotel occupancy rates getting closer to pre-pandemic levels

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NASHVILLE, Tenn. (WKRN) — Events and tourism are picking back up again in Music City, so what does that mean for one of the city’s biggest industries, hospitality?

According to data from STR, occupancy rates are inching closer to all-time high numbers the city saw in 2019.

Here are some comparisons based on certain months of the year:

September:

  • 2019: 76.8%
  • 2020: 39.3%
  • 2021: 65.5%

August:

  • 2019: 75.3%
  • 2021: 65.0%

April:

  • 2019: 78.4%
  • 2021: 56.8%

Chelsea McCready, Senior Director of Hospitality Market Analytics at the STR’s parent company CoStar Group, said this is a trend that is happening across the country.

“We saw some softness in August and September, which is typical, but a little more than we would have expected because of the Delta variant,” she said. “Hotel room rates have actually exceeded pre-pandemic levels for the past three months. That’s driven primarily by weekends and leisure travelers.”

The “building boom” is another factor in the results. At every turn, a new hotel is popping up in Music City. STR says about 10% of existing room inventory in Nashville is currently under construction.

“Nashville has been near or at the top of the supply growth list for several years now and that is continuing,” McCready said. “We are expecting to see the highest number of rooms open this year in the city’s history.”

However, Nashville is still trailing behind national recovery trends due to their reliance on conventions and conferences.

“If the meeting planner wants to host the conference, or just make it a virtual conference again depends on whether or not the attendees feel safe enough to travel to Nashville or any other market to actually attend,” McCready said. “Most conferences are seeing about half of their typical attendance for any meetings, so in the short term, we’re very much focused on that group segment.”

Markets that have recovered well have primarily been along the coast or with less COVID-19 restrictions, including Norfolk, Virginia Beach, Myrtle Beach, Miami and Tampa.

Prior to the pandemic, 40% of the room demand in Nashville came from conventions, conferences, weddings and tours.

“It’s likely going to take until 2024 before we’re fully back to 2019,” McCready said. “2019 was a peak year for Nashville and the peak year for the entire country. That’s the case with most major markets across the country.”

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