Palm Beach Hospitality Market Report
Market Overview
Palm Beach County has the third largest population in Florida, trailing only Miami-Dade and Broward County, boasting a residency of over 1.5 million people. With a personal income that ranks as the fourth-highest in the state, exceeding the state average by more than 60%, Palm Beach stands out as one of Florida’s most affluent counties. The region’s significant focus on financial activities, professional services, and business-related employment contributes to elevated median household income levels compared to its neighboring southern cities of Fort Lauderdale and Miami.
Market Performance
The hotel industry in Palm Beach saw minimal growth in 2023 following record-breaking levels of demand, ADR, and RevPAR in 2022. RevPAR was up 1% through September 2023, with ADR up 2% and occupancy down 1%. The number of new rooms introduced in 2023 amounted to approximately 375, surpassing the figures for both 2021 and 2022. Another 350 rooms are currently in the construction phase and are projected to be available in 2024. The surge in supply has led to a reduction in occupancy rates, and the rooms slated to open in 2024 are expected to further limit the potential gains in occupancy
By The Numbers Last 12 Months | Source: CoStar Group
- Occupancy: 67.8%
- ADR: $253.11
- RevPAR: $171.48
- Rooms: 19,342
Construction
The majority of rooms under construction fall within the Upper Upscale and Luxury categories. Anticipated to open in Q1 2024 is the Amrit Ocean Resort and Residences, a 155-room Upper Upscale property located on Singer Island. The One West Palm Hotel, a 201-room Upper Upscale hotel, is set to open in Q4 2024, while the Luxury Mandarin Oriental Boca Raton, featuring 164 rooms, is expected to welcome guests in 2025.
Sales
In a usual year, Palm Beach witnesses approximately 17 hotel transactions, but the level of activity in 2023 was notably lower. From January to October 2023, only five hotels in the market were traded. Increasing interest rates and more stringent lending standards have influenced sales activity, and there is apprehension that the rising expenses related to property insurance could further impede hotel sales in Florida.
