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Market Update – Where are they Now? An Essential roundup of the 2017 Nashville Hotel Market

 Where are they Now? An Essential roundup of the 2017 Nashville Hotel Market

With 2017 coming to a close and the new year right around the corner, it is useful to take a look back on the thriving year Nashville's hospitality industry has had. While construction and renovations will persist into 2018, we predict the industry's focus will pivot. Through operations, rate yielding, sales and marketing efforts, culinary offerings and amenities, it will be interesting to watch how these hotels attempt to separate from one another in a newly saturated market.

Today we recap our blogs of 2017 while keeping a close eye on 2018.

The Big Kahunas:

The three properties highlighted this year as the "Big Kahunas" - defined as such by bringing more than 450 rooms into the market - were The Westin Nashville, the JW Marriott and the tri-branded Marriott property of and-hotel-feature/">Springhill Suites/Residence Inn/AC Hotels Nashville Downtown. The Westin of course has had a jump on the other two properties, completing its first full year of operations in Nashville, while the much-anticipated JW Marriott and the first ever tri-brand Springhill Suites/Residence Inn/AC Hotels Nashville Downtown are working quickly through their construction processes. That is not to say these are the only big hotels entering into the market. In the Final Planning stages we have a 591-room Hyatt anticipated in February 2020 and a proposed 721-room Embassy Suites/Curio property setting sights for late 2018. Like the other three Big Kahunas, these two properties will play up proximity to Music City Center, and like all other properties coming into Nashville are banking on increased demand of the market to sustain appropriate business levels.

Boutique Row:

As examined back in the summer, one city block of Nashville has seen an interesting and particular boom with four hotels (or 618 guest rooms) under construction in very close proximity to one another. Dubbed "Boutique Row," the block of 4th Avenue between Church St. and Union Ave. is experiencing a race to the finish as two of the four hotels under construction, which were supposed to open in 2017, have seen significant delays. The Noelle Hotel originally slated to open in the spring of this year on the corner of 4th and Church, and The Fairlane Hotel originally slated to open in September on the corner of 4th & Union, are just wrapping up and working feverishly to open their doors. The other kids on the block, The Dream Hotel and The Bobby, will follow suite in 2018 completing this tight concentration of properties. All with a heavy focus on the transient guest, each has limited meeting/event space, heavy focus on destination dining, and a communal “hangout” or “lounge” space for guests to enjoy. Other hotel groups approaching a similar model in the new year are the following lifestyle brands: Hayes Street Hotel, Cambria, Unbound by Hyatt, two Moxy hotels, and a Virgin Hotel.

Not so Limited Service:

Traditionally offering limited amenities, points of service, and little to no food and beverage options, the attractive model of Limited or Select Service hotels is popular amongst developers and owners for its high and quick rate of return. Consumers benefit from above average rate value or reward point opportunity, and are drawn to explore restaurants, gyms, spas and services of the surrounding area. A snapshot of Nashville properties opening in this category aim not only to further saturate the downtown market, but also to fill the needs of smaller micro markets such as Green Hills, the West End, and Vanderbilt Business District.

The most anticipated limited service properties coming to Nashville, and all slated for 2018, are the Cambria Suites by Hilton (located at 118 8th Avenue South), Moxy Hotel Downtown Nashville (located at 3rd Avenue South & Broadway), and the tri-branded Marriott property of Springhill Suites/Residence Inn/AC Hotels Nashville Downtown (located at 410 5th Avenue South). Additional limited service properties still under construction include: MOXY Hillsboro Village, TownPlace Suites Goodlettsville, Residence Inn Opryland, Wingate by Wyndham, Hampton Inn & Suites Goodlettsville, Fairfield Inn Airport, Residence Inn Green Hills, and Hampton Inn & Suites Nashville Downtown. It seems that 2018 might become the year of the Limited Service here in Nashville.

Renovations - A Nip and a Tuck:

While we spent a good portion of this year examining the new properties entering Nashville's hospitality market, we couldn't ignore the ways in which existing and established properties have tried to stay fresh and relevant. Existing properties often face the perception that they are not the new and shiny hotspot in town, so in an effort to combat flat or negative RevPAR growth, seek out renovations and upgrades. Three such examples we saw this year were the Union Station Hotel, Hutton Hotel, and the Renaissance Hotel - all of which underwent significant refreshes to their properties. The first two focused highly on modernizing and upgrading guest rooms and guest spaces, while the Renaissance placed an emphasis on adding more meeting and event spaces. All three completed an overhaul of their food and beverage offerings adding and renovating their main restaurants. As the market continues to evolve in 2018, it will be interesting to watch how Nashville's established properties stay relevant and front of mind in a sea of shiny new hotspots.

To sum it all up, 2017 was decidedly a pivotal year for Nashville. The city has undergone significant growth and changes, not only in the hospitality market, but economically, demographically, and structurally. Tourism shows no signs of slowing down, giving new and existing hoteliers a positive outlook into 2018. As another 2,979 rooms come onto the market next year bringing swanky boutique properties, value rate limited service hotels and more renovations, we predict the fever to continue. Stay tuned as we continue to monitor this thriving market next year!

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