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HVS Report

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Market Report St. Louis

The St. Louis lodging market was growing when the COVID-19 pandemic struck in March 2020 and hindered its momentum. A healthy healing occurred in 2021, and by year-end 2022, the city’s hotel efficiency was back on track. Headwinds stay, the outlook is favorable, as financial investments throughout St. Louis are paving the method for strength in the hotel market.


Current and Projected Hotel Performance

Comparable to the remainder of the country, hotel metrics in St. Louis dropped in 2020 at the start of the COVID-19 pandemic, however the marketplace had actually gone into a healthy healing stage by the spring of 2021. Development sped up through the rest of the year, sustained by a rise of leisure travel and the sluggish reemergence of business need, along with the return of conventions and significant occasions.

Need continued to enhance in 2022, as business staff members slowly went back to workplaces and presence at big conventions and occasions increased. Increasing labor expenses and the shift in travel patterns, as leisure need quickly increased and industrial travel was slower to recuperate, triggered hoteliers to strongly press rate development. As an outcome, ADR reinforced robustly in 2022, going beyond the pre-pandemic high by over 10%. Tenancy has actually continued to track pre-pandemic efficiency, RevPAR for 2022 almost reached the 2019 level.

As shown listed below, we anticipate these favorable patterns to continue.

Historic and Forecasted Metrics– St. Louis Market


Source: STR (Historical), HVS (Forecast)

Need and ADR Growth Drivers

A variety of aspects and advancement tasks throughout St. Louis need to improve hotel need and boost prices power in the coming years, as described listed below.

  • The National Geospatial-Intelligence Agency is building a brand-new $1.7-billion, 97-acre school, which is anticipated to be completely functional in north St. Louis by 2026. The firm is not brand-new to the area, the brand-new school is anticipated to be accompanied by extra research study and company collaborations with personal business and regional organizations.
  • The St. Louis location is a center for research study and advancement in the bio- and life-science sectors, anchored by the regional operations of business such as Bayer Crop Science, Pfizer, and Mallinckrodt, as well as the Donald Danforth Plant Science. Continued development within this sector will be supported by additional advancement at 2 development districts: the 600-acre 39 North in rural Creve Coeur and the 200-acre Cortex in the city’s Midtown area.
  • The America’s Center Convention Complex is presently going through a growth that will upgrade the center, include brand-new occasion area, and permit quicker turnover in between occasions. The task began in 2022 and is anticipated to be finished by early 2024.
  • The 2023 season will be the inaugural season for the city’s brand-new Major League Soccer (MLS) franchise, the St. Louis City SC. The group will dip into the new, 22,500-seat CITYPARK arena situated near the just recently remodelled St. Louis Union Station.
  • Prior to the pandemic, in the fall of 2019, the St. Louis Aquarium and St. Louis Wheel opened at Union Station. At the other end of Downtown, the St. Louis Gateway Arch concluded a $380-million restoration in 2018 that included brand-new interactive displays. COVID-19 constraints hampered the preliminary ramp-up of these tourist attractions, however they assisted draw strong visitation to the marketplace in 2021 and 2022.
  • Beyond Downtown, a $230-million, 425-acre growth of the St. Louis Zoo is underway. Upon conclusion in 2027, the brand-new WildCare Park will provide visitors a one-of-a kind immersive safari experience including a range of big-game types in a natural park-like environment.
  • On the western borders of the St. Louis city location, The Hoffmann Family of Companies invested roughly $150 million in 2021/22 on preliminary acquisitions targeted at changing the Missouri River Valley into a global wine-tourism location.

Hotel Development

The higher St. Louis market experienced a revitalization of its hotel supply over the previous twenty years thanks to fairly low-cost financial obligation and just moderate boosts in building and construction expenses. Many adaptive-reuse tasks in St. Louis were supported by generous advancement aids and an adequate stock of under-utilized historical structures.

These market conditions have actually altered given that 2020. The pandemic significantly slowed the hotel building and construction pipeline, and the subsequent boosts in advancement and capital expenses have actually restricted the variety of brand-new hotel tasks. Choose tasks will still move forward, expense restraints are showing to be a high obstacle that will avoid all however the greatest jobs from coming to fulfillment.

In 2022, the City of St. Louis executed a brand-new structure for assessing advancement tasks that will make it much more tough for hotel tasks to get tax reductions, tax increment funding (TIF), and other aids.

Offered these aspects, increases in the area’s hotel supply are anticipated to be more modest in the coming years than in the current past. The following tables show the breakdown of brand-new hotel jobs we are presently tracking, along with expected levels of supply development for the next couple of years.

Hotel Rooms in Development within St. Louis

Source: HVS
Supply Growth in St. Louis


Source: STR (Historical), HVS (Forecast)

Efficiency and Investment Outlook

Brand-new hotel advancement is anticipated to deal with obstacles in coming years, the minimized advancement pipeline integrated with the abovementioned financial investments in the local economy bode well for the efficiency of existing possessions. Our expectations for the St. Louis hotel market are as follows:

  • More tenancy healing as reinforcing leisure and group need makes up for the sticking around pandemic influence on service travel
  • Stable ADR development equaling, or decently surpassing, inflation
  • A multi-year duration of healthy RevPAR gains

The robust supply and need basics laid out above must lead the way for both more powerful functional efficiency and minimized volatility threat. For a variety of years, financial investment in St. Louis-area hotels has actually been controlled by local designers and entrepreneurial owners, with just minimal interest from personal equity and institutional financiers. St. Louis hotel financiers who stood firm through the trials of 2020 and the occurring healing are now reasonably well located offered the beneficial market outlook. The existing market characteristics need to assist draw in financial investment to the location from formerly untapped capital sources.

To find out more, call our St. Louis market specialists, Daniel McCoy and Benjamin Giebler

About Daniel P. McCoy

As the HVS Practice Leader for the Midwest, Dan McCoy, MAI, supervises the company’s 7 workplaces in this area. A Senior Managing Director at HVS, Dan is an acknowledged thought-leader, collective consultant, and important resource for the Midwest’s lodging market. He integrates a deep understanding of local hotel markets with strong analytical thinking to supply a wide array of customers with updated hospitality intelligence and custom-made options. Dan is a Designated Member of the Appraisal Institute (MAI) and a licensed basic appraiser. Contact Dan at +1 (970) 215-0620 or dmccoy@hvs.com.

About Benjamin Giebler

Benjamin Giebler is a Project Manager with the St. Louis HVS consulting and appraisal practice. Benjamin acquired his Missouri Real Estate License in 2018 and Kansas Real Estate License in 2020 and worked as an industrial property representative in Kansas City. His experience in the hospitality market consists of working as a valet and bell manager at the Marriott Downtown Kansas City, and he became part of the opening group at Hotel Kansas City as a front workplace and bell manager. He finished from the University of Missouri-Kansas City with a Bachelor of Science in Business Administration with a focus in Real Estate and Finance. In addition, he made a certificate in Hospitality Real Estate Investments and Asset Management from Cornell University. Contact Benjamin at (816) 589-0922 or bgiebler@hvs.com.