Southern Hospitality: The Resurgence of Hotel Investment Activity in The United States in 2024
Terrydale Capital
Jan 31, 2024 5 Min read
The United States’ hotel industry experienced a small renaissance of sorts during the later part of 2023 with 5,964 projects undergone, with an addition of nearly 694,000 rooms. At the beginning of 2024, this sector seems poised to stand strong - especially within the Southern United States. In this blog, we will cover what developments are happening in the hospitality industry, and give insights into how investors can benefit from investing in hotel assets.
Breakdown
According to Lodging Econometrics’ latest report, of the 5,964 projects and 694,000 rooms developed in 2023, 260 projects with 21,000 rooms were added in Q4 alone. This strength of expansion is estimated by experts to carry into 2024 with a large mass of expansion being undergone in the Southern United States.
Dallas has emerged as the leader in the boom with 260 projects with over 21,000 rooms entering the pipeline in Q4, 2023 alone. Prior to Q4, Dallas held the lead with 193 projects with over 22,000 rooms in development, which was a stark contrast to the abysmally low numbers of 2022.
Closely behind Dallas came Atlanta with a personal record of 151 projects and 18,730 rooms in developments. Phoenix and Nashville boasted significant growth as well with Nashville engaging in 123 projects with 16,148 rooms and Phoenix heralding 122 projects with 15,977 rooms.
Dallas is poised to lead the charge in hotel development in the United States amidst 2,259 projects slated to begin in 2024 nationally. At the outset of the year thus far, New York set the lead with 28 projects and 3,050 rooms. Dallas in second with 18 projects and 2,333 rooms, Phoenix in third with 17 projects and 3,070 rooms, followed by Atlanta with 15 projects and 2,808 rooms.
Looking Ahead
With the Fed hinting at cutting interest rates in 2024, lower borrowing costs could kick-start additional projects and acquisitions on top of the 2,259 projects already slated. JLL predicted in a report that investors will return interest into hotel assets across the globe in 2024 with between 15% - 25% increases in spending. Upper-midscale to luxury hotel assets are predicted to be the most popular investment avenues for commercial real estate professionals. Cities that center their focuses on “intentional tourism” and utilize new technology will, in-turn, gain long-term interest from investors. Foreign capital is anticipated to be the most acquisitive in 2024.
Capitalizing on Opportunity
With not only interest, but opportunity, beset before investors in 2024, the next question is how to capitalize on the event. Investors should take great note into where they seek to lay the roots for their investment and dive deeply into copious market research. However, the primary action to help leverage success is engaging with the right financial partner. At Terrydale Capital, we have seen the growth in hotel investment activity firsthand as we actively engaged with hotel deals in 2023 and currently at the outset of 2024. We understand what it takes to reach investment success and navigate the complex world of commercial real estate financing. When you need the right team for your commercial real estate investing journey, contact Terrydale Capital today.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
