1Q 2015 Downtown and D.C. Hotel Market Update

Downtown and D.C. Hotels Appear Headed for New Records in 2015

Downtown and D.C. hotel performance appear headed for new records in 2015 for both revenue and revenue per available room night (RevPAR).  Regionally, 1Q 2015 data indicates that although D.C.’s suburban hotel market RevPAR is only 50-70% of D.C.’s RevPAR, these suburban competitors are growing faster in both RevPAR and hotel room revenues than in the past few years. Nationally, Revenues and RevPAR are growing faster in D.C. when compared to some other large U.S. cities, and regarding RevPAR, D.C. has moved ahead of Boston, trailing only New York City and San Francisco.

D.C. hotel 1Q 2015 revenue performance improved over 1Q 2014 and set new records due to both an increase in the number of rooms and an increase in RevPAR.  It should be highlighted again that Downtown hotels continue to enjoy a year-over-year increase in RevPAR despite being able to absorb the opening of the Marriott Marquis Hotel which increased the supply of Downtown hotel rooms by 1,175, or 9.5%, of the Downtown hotel room supply and increasing the D.C. hotel room supply total by 5%.  The first 2015 D.C. hotel opening took place in Downtown when the K Street Hyatt Place opened in May with 164 rooms. Fourteen hotels currently under construction in D.C. will add 2,904 rooms to the market over the next two years. Another nine hotels with 1,853 rooms are in the planning stages and are expected to break ground in the next 12 months.

These first quarter trends continued in April 2015 and the first half of May 2015. D.C.’s April RevPAR of $232 additionally boosted D.C into the No. 2 RevPAR ranking among major cities (behind only Manhattan).

The following data highlights 1Q 2015 hotel performance and new hotel development. For additional information, please see the accompanying pdf of hotel data available for download or view our Interactive Hotel Dashboard.

Downtown, Rest of D.C. and Total D.C. 1Q15 Performance*

Revenue

• DowntownDC BID area 1Q15 YTD hotel room revenue increased by $15 million to a 1Q record of $157 million, up 10.2% from 1Q14.
• In the rest of D.C., 1Q15 YTD hotel room revenue increased by $7 million to a 1Q record of $219 million, up 3.4% from 1Q14.
• D.C. 1Q15 YTD hotel revenue increased $21 million to a 1Q record of $375 million, up 6.2% from 1Q14.
• The BID-area, the rest of D.C., and D.C. hotel performance increase in was due to both an increase in room supply and RevPAR.

RevPAR

Downtown continues to produce higher RevPAR (a function of both room occupancy rates and average daily rates or ADR) than other D.C. hotels:

• Downtown’s 1Q15 occupancy rate was 72.2% versus 69.5% for the rest of D.C.
• Downtown’s 1Q15 ADR was $229 versus $193 for the rest of D.C.

• DowntownDC BID area hotels’ 1Q15 YTD RevPar of $165 is up 0.7% from 2014.
• D.C.’s total hotel 1Q15 YTD RevPar is $145 and up 1.1% from 2014.
• In the rest of D.C. area, 1Q15 YTD RevPar is $134 and up 0.8% from 2014.
• RevPAR figures in 1Q15 for all areas were only topped by RevPARs for 1Q09 and 1Q13 which were during President Barack Obama’s first and second inaugurations.

Recent Downtown and D.C. Hotel Openings

• Three May 2014 openings (1,595 rooms):
  • Marriott Marquis Convention Headquarters Hotel, 901 Massachusetts Avenue, NW, with 1,175 rooms
  • Cambria Suites, 1400 7^th St, NW, with 182 rooms
  • Hilton Garden Inn, 2201 M Street, NW, with 238 rooms
• One June 2014 opening (200 rooms):
  • Hyatt Place, 33 New York Avenue, NE, with 200 rooms
• One May 2015 opening (164 rooms)
  • Hyatt Place, 1522 K Street, NW, with 164 rooms

Future D.C. Hotel Development

• Under Construction: Fourteen hotels currently under construction in D.C. will open in the next two years, adding 2,904 rooms or 10% to D.C.’s existing 29,153 rooms (room totals as of May 26, 2015). The hotels currently under construction are listed below in the general order that they are projected to open:
  1. Hive Hotel located at 2224 F Street, NW with 83 rooms
  2. Homewood Suites located at 501 New York Avenue, NE with 114 rooms
  3. Hampton Inn located at 501 New York Avenue, NE with 125 rooms
  4. Homewood Suites located at 465 New York Avenue, NW with 163 rooms
  5. Hampton Inn located at N and First streets, SE with 168 rooms
  6. Hyatt Place located at 2121 M Street, NW with 168 rooms
  7. Marriot Residences developed by Grosvenor & McCaffrey located at First and M streets, SE with 170 rooms
  8. Homewood Suites located at 50 M street, SE with 195 rooms
  9. Hyatt Place located at 4th and E streets, SW with 214 rooms
  10. The Line located at 1780 Columbia Road, NW with 220 rooms
  11. Trump Hotel located on Pennsylvania Avenue, NW with 263 rooms
  12. InterContinental developed by The Wharf Madison Marquette/PN Hoffman, SW with 275 rooms
  13. Watergate Hotel located at 2650 Virginia Avenue, NW with 338 rooms (under renovation)
  14. L’Enfant Plaza Hotel located at 480 L’Enfant Plaza, SW with 408 rooms (under renovation)
• Planned/Projected:  Nine hotels which plan to break ground in the next 12 to 24 months will add 1,853 hotel rooms to D.C.’s 31,454 existing & under construction rooms, an increase of 5.9%.
  1. 1337 Connecticut Avenue, NW developed by Valor Development with 50 rooms
  2. 1025 15th Street, NW developed by Honeybee Hospitality LLC with 75 rooms
  3. Residence Inn at 9^th & L streets NW with 190 rooms
  4. Hotel at 901 5^th Street, NW developed by Peebles with 198 rooms
  5. Modus Hotel Monument/Modus broke ground June 9, 2015 at 613 H Street, NW with 245 rooms
  6. Courtyard Hotel at 9^th & L streets NW with 310 rooms
  7. Conrad Hotel at CityCenterDC developed by Hines with 370 rooms
  8. One of two hotels developed by The Wharf Madison Marquette/PN Hoffman, combined the two hotels have a total of 415 rooms
  9. The second of two hotels developed by The Wharf Madison Marquette/PN Hoffman, combined the two hotels have a total of 415 roomss

*Hotel operating data provided by Smith Travel Research, Destination DC and organized by the DowntownDC BID.  Hotel development data provided by the DowntownDC BID.