Kidder Mathews Releases Q1 2024 Seattle Hotel CRE Market Update –

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Some Seattle-area hotels continue to struggle amid a lack of business travel and continued low office occupancy compared with pre-pandemic levels. There are, however, signs of improvement and hotel performance is anticipated to see a greater lift, according to the recently released Seattle Hotel CRE Market Update. 

“Some downtown hotels still continue to struggle, weighed down by continued low office occupancy and a related reduction in business travel. However, most suburban hotel occupancy rates are at or near pre-pandemic levels, and room prices have increased rapidly in the overall market and all submarkets,” said commercial real estate firm Kidder Mathews in its announcement of the market update. “With limited growth in supply, completion of the convention center expansion, continued cruise ship visitor growth, and Seattle being one of the host cities for the 2026 FIFA World Cup, the expectation is for continued steady growth in demand.” 

Immediately prior to the pandemic, trailing 12-month occupancy was 73.5% in Q1 2020, which fell to a low of 32.6% in February of 2021. Overall market occupancy improved to 53.1% in Q1 of 2022, to 66.8% in Q4 of 2023 and to 67.6% in Q1 of 2024.

The average daily rate (ADR) fell from $160 in Q1 2020 to $100 Q1 2021 with the onset of the pandemic. It has since consistently improved, hitting $177 in Q1 2024. According to Kidder Mathews, this translates into a rise in revenue per available room (RevPAR) from $35 in Q1 2021 to $120 in Q1 2024. This is slightly above the RevPAR of $118 in January 2020, just prior to the pandemic, the update said.

During Q1 2024, there were four sales of hotels in the greater Seattle market with prices exceeding $10,000,000. In addition, six hotels are now under construction.

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