The Southeast’s Shining Hospitality Activity

Events and new deliveries make the Southeast a standout region nationally. In just the first quarter, the Southeast added over 6,000 rooms, a large jump compared to the 3,600 rooms that opened in Q1 2024. Of these new additions, more than half opened in Florida, with around a quarter opening in Georgia. Combined, both states are looking forward to hosting a variety of events.

 

Florida Boasts Full Event Slate

Although Florida led the region in new deliveries for the first quarter, it recorded a decline in sales. Associate Vice President Mabelle Perez stated transactions in Florida have fluctuated for the past few years. “Sales activity went parabolic in Florida from 2021 through 2023,” Perez stated. “In 2024, concerns around interest rates, insurance, and the presidential election all created a perfect storm to decrease sales activity coming into Q1 2025.”

 

The state recorded a total $9.7 billion in transactions for the first quarter, led by the Full Service segment, but this volume is still a decrease from the $13.5 billion achieved in Q1 2024. Despite this slowdown, Florida added 3,226 rooms that opened in the first quarter of this year. About two-thirds of the new additions are in the Full Service segment, with two 750-room hotels delivering in Orlando.

 

Florida’s Hotspots

As the state adjusts to the deliveries, it is also preparing for new events that will drive room bookings. One of the most notable events on the way is the 2026 FIFA World Cup, which will feature Miami as a host city next year. The events will begin in June and July, but Miami officials are already preparing for visitations. The city is expected to see hundreds of thousands of visitors arrive for the events, and is forecast to have a total $1.3 billion economic impact on Miami-Dade County.

 

Hard Rock Stadium will welcome visitors, and nearby areas like Wynwood, Downtown, and Miami Beach will also become hotspots. Spillover benefits are also expected to aid Fort Lauderdale and West Palm Beach, thanks to the Brightline high-speed rail system. With service connecting to these metros, as well as Orlando, hoteliers can capitalize on increased visitations for the World Cup.

 

Other metros across the state are recording increased activity, according to Perez. “Places like Tampa, Sarasota, and Fort Myers are heating up,” Perez said. “People are drawn to better cap rates, infrastructure growth, and population migration in these areas.”

 

Tampa, specifically, is notable for its job growth, cruise traffic, and airport expansion, which are all enticing factors for investors.

 

“Florida as a whole will remain a top target,” Perez emphasized. “We’ve got population growth, no state income tax, and a tourism economy that keeps evolving. I don’t see that slowing down anytime soon.”

 

Demand Gains in the Southeast

Similar to Florida, Georgia also noted ongoing hotel construction in the first quarter with the addition of 1,463 rooms. Atlanta consistently benefits from an influx of travelers, due to the presence of Hartsfield-Jackson International Airport. In 2024, the airport served 58.8 million passengers, which is a 10% increase over the previous year. Corporate travelers greatly contribute to the airport’s activity, with corporate demand rising in the second half of 2024.

 

Atlanta is also set to host World Cup events next year with eight matches, as well as one semifinal. The matches are expected to total an economic impact of $1 billion, and the metro estimates more than 300,000 visitors arriving for the tournament. There is a $120 million initiative in the works to prepare the city for its guests, and hoteliers are already preparing to accommodate the visitor influx.

 

The Carolinas

Charlotte

North and South Carolina are noting increased visitations, due to their strength as popular destinations for both corporate and leisure travel. In Charlotte, the metro’s prominence as a financial center allowed for an increase in group travel, with group business accounting for about a quarter of its performance in 2024. This comes as the metro hosted about 45 events at the Charlotte Convention Center. Now, Charlotte is expected to note RevPAR growth of more than 5% for the rest of 2025.

 

Charlotte’s construction pipeline will continue increasing to meet demand, according to Associate Lane McCool. “Though particularly for business and convention-related travel, Charlotte is seeing steady demand growth,” McCool said. As more visitors arrive in the metro, there are about 1,800 rooms underway, and more than 3,600 rooms are planned with openings in 2026 and after.

 

McCool added that Raleigh-Durham is another key metro that benefits from constant business travel. “Raleigh-Durham stands out due to its thriving technology, life sciences, and academic sectors,” McCool stated. “With proximity to major universities and 29 hotels planned or under construction in Wake County, this indicates strong developer confidence in long-term demand.”

 

The Research Triangle in the metro is a prominent area to watch, due to its economic strength and business travel. Its successful performance led Raleigh-Durham to record an occupancy rate of 66.9% at the end of Q1 2025.

 

Charleston

While Charlotte and Raleigh-Durham are frequently visited as corporate travel destinations, Charleston is a standout market for leisure travel. The metro is home to several historical sites, and is also appealing for its beaches and golf courses. Despite its enticing location and variety of leisure opportunities, Charleston has a high barrier to entry, due to limited developable land and zoning regulations.

 

This difficulty led to only 72 rooms opening in 2024, but now there are more than 3,000 rooms in the planning phase, with the upscale segment accounting for 56% of the inventory. Vice President Mitchell Glasson stated that strategic timing is key when it comes to Charleston’s construction pipeline.

 

“Investors should focus on upscale and upper midscale properties, which maintain strong occupancy at 72% and offer stable returns,” Glasson emphasized.

 

One new development that leisure travelers can look forward to is The Cooper, which will open on the eastern side of Charleston in June 2025. The upper upscale hotel consists of 209 rooms, five dining locations, a meeting center, a rooftop pool, and more. The Cooper will deliver in the Charleston/West Ashley submarket, which Glasson noted as a high-performing area in the metro. “Despite flat RevPAR growth in 2024 at $120.27, Charleston/West Ashley’s dominance with a $183.52 RevPAR highlights its premium positioning,” Glasson said.

 

California Begins Hospitality Recovery

Across the state, California recorded struggles in visitations since COVID-19. The Bay Area was one of the hardest-hit markets, noting decreases in international and domestic travelers. This slowdown is one factor that led to one of the metro’s most difficult periods in transaction volume, according to Associate Ryan Sanchez. “In the two years leading up to 2025, we saw a significant downturn in overall transaction volume, with 2024 being the fourth-lowest year in the last 15 years,” Sanchez said.

 

Now, the Bay Area is forecast to slowly start noting a recuperation in its hospitality sector as higher-end hotels are outperforming lower-tier hotels. “Room rate increases for non-luxury hotels are lagging behind inflation, compressing profit margins as operational costs continue to climb,” Sanchez stated.

 

“In essence, luxury hotels are regaining the ability to command higher prices, whereas budget hotels struggle to achieve meaningful rate increases in real terms,” Sanchez explained.

 

Several events are on the way in the Bay Area, which will increase both international and domestic visitations. Expectations for convention room night bookings are forecast to be greater than 600,000 this year, which will be approximately 40% above 2024 levels. San Francisco will continue to see an uptick in visits moving forward as it is hosting the 2026 Super Bowl and is a host city for the World Cup.

 

Midwest Demand Shifts

New opportunities in the technology industry increased performance in Midwest markets. Specifically, Columbus is gaining attention for its Intel semiconductor investment, according to Associate Luke Whittaker. “The market is evolving into a tech-centric, innovation-driven place, which is creating a ripple effect on corporate travel and extended-stay demand,” Whittaker stated. Across the region, Whittaker noted that Indianapolis is benefiting from its strong calendar of conventions and sports tourism, while suburban areas in Chicago are seeing renewed interest because of industrial growth and regional business travel.

 

As the Midwest records an uptick in visitors, it is also noting a change in activity within its hospitality segments. Visitors are now most attracted to select-service and extended-stay hotels, which led to these sectors outperforming in the Midwest.

 

“These properties tend to be more cost-efficient to operate and cater to a mix of transient, corporate, and long-term guests—especially construction crews, healthcare travelers, and government-related stays,” Whittaker said.

 

The increase in demand for these hotels will also benefit smaller Midwest cities. “Affordability, infrastructure investment, and population shifts to lower-cost regions will continue to attract both institutional and private capital,” Whittaker stated. These trends are expected to stay moving forward, which will aid the entire region.

 

National Trends and Forward Expectations

Extended-stay hotels are not only recording increased demand in the Midwest, but also across the country.

 

“Extended-stay is leading the pack in terms of developer and investor demand,” Perez expressed. “They’re operationally efficient, have stable occupancy, and appeal to workforce and long-term guests.”

 

Due to their popularity, the extended-stay sector recorded stable performance in the first quarter of 2025. Occupancy averaged 70% in this timeframe, with March noting the greatest occupancy rate at 75%. New rooms in this segment are also expected to rise, with 42,000 rooms under construction expected for delivery this year and in 2026.

 

Other trends that will benefit the hospitality sector include the addition of technology efficiency in business models. “Automation is picking up with mobile check-in, AI-enhanced operations, and leaner teams,” Perez stated. “Cap rates will stay tight in core markets, but value-add and conversion opportunities will offer great upside in less saturated areas.” New activity also includes how rising insurance premiums are pushing buyers to look at newer builds or inland assets that are better prepared for storms. “Buyers are asking deeper questions about flood zones, roofs, and insurance, which will matter more in underwriting,” Perez said. Overall, these new changes in the hospitality industry will set the stage for top performance in the years to come.