News for the Hospitality Executive
Tampa Bay's Lodging Market Making Steady
by Allison Fogarty
January 30, 2013
Tampa Bay’s lodging market accelerated sharply in 2012 abetted by the much touted Republican National Convention in late August. Although media-fueled speculation about the path of Tropical Storm Isaac threatened to put a damper on the festivities, hoteliers throughout the region (no matter what their politics) were cheered by the sight of convention delegates flooding into the region during a traditional occupancy crater. In Hillsborough County alone, RevPAR in August 2012 was up almost 55 percent on the prior year. Across the bay, Pinellas hotels also benefited, as RevPAR was up 27 percent over 2011.
The Tampa Bay regional lodging market is
comprised of four
counties – the northern suburban counties of Hernando and Pasco,
which includes the City of Tampa, and densely populated Pinellas County
includes St Petersburg and Clearwater, and a large swath of Gulf of
beachfront. Hillsborough and Pinellas represent about 50 and 42 percent
region’s rooms inventory, respectively. In 2012, according to Smith
Research statistics, the regional hotel market finally approached 2007
levels, ending the year at 63.1 percent occupancy at an average rate of
over $100, finally absorbing the supply of rooms completed during the
number of properties have not survived the downturn, and while some
fell into the hands of lenders, a few of the older and poorly
closed, resulting in a slight decrease in supply in 2011, and no net
in supply in 2012. Demand during the same period increased by 9.2 and
percent, respectively. In Tampa, the long-shuttered luxury Floridan
re-opened after an extended renovation during the summer, and on
Beach, the Pier House 60 Marina Hotel opened on the site of the late
With RevPAR’s on the rise, there has been a decided uptick in hotel sales activity in 2012, as involuntary owners worked to clear their books, and some investors’ rejigged portfolios. In Pinellas County, more non-real estate owned sales occurred in 2012, according to county records, than in the prior three years combined. Prices ranged widely from $17,000 to $118,000 per key and averaged $62,000 per room. Across the bay in Tampa, transaction activity remained sluggish with sales mainly limited to REO or portfolio sales.
Over the next year, we expect continued improvement in the lodging market. Although 2013 convention activity will be soft, prospects may be better than the figures demonstrate, as convention planners continue to be very conservative with their hotel blocks, and frequently pick up more rooms than initially booked. In addition local hotel sales executives have noted, and frequently bemoaned, the trend of convention attendees to book outside the block, often through OTAs. Hoteliers are (very) cautiously optimistic about the prospects for 2013. Most seem to believe that provided the government does not precipitate another economic downturn, the prospects for the year are positive, and expect increases in business and leisure travel to make up any softness in the convention market. As a result, Pinnacle Advisory Group forecasts a 3.0% increase in RevPAR in the Greater Tampa Bay region.
Development interest in the Tampa Bay market has revived, with three limited and select service properties under construction, and five properties recently announced and in various stages of the planning process. A 115-unit Hampton Inn on Clearwater Beach received CDD approval earlier this month and is slated to go before the City Council shortly. In Tampa, an aloft has been announced for a site along the Hillsborough River and plans for the conversion of the old federal courthouse into a 110-unit Le Meridian are well underway. Two additional projects have also recently been announced as part of mixed use developments: a proposed 350 unit hotel within an office complex near the University of South Florida’s Center for Advanced Medical Learning and Simulation which expects to draw more than 30,000 health professionals to the City annually for training, and a proposed project at the riverfront site of the shelved Trump Tower. All four Tampa projects are located within a short distance of each other in downtown Tampa which has historically boasted the highest RevPAR among the Hillsborough County submarkets.
Recovery is well underway in the Tampa Bay
employment levels have increased at rates well above the rest of the
during the past year. Developers have taken note, and although some
most notably North Tampa, continue to post RevPARs below national
partially due to a large supply of older product, the region as a whole
poised for a growth period.
Since 1991, Pinnacle Advisory Group (www.pinnacle-advisory.com) has provided advice and analysis on the full spectrum of hospitality properties throughout the US and Caribbean: hotels, resorts, conference centers, mixed use projects, convention centers and exhibition centers. Pinnacle’s services include development counseling, appraisals, acquisition due diligence, asset management and litigation support. Our clients include leading hotel companies, REITs, universities, major banks and municipalities. We specialize in providing personalized advice on complex projects, carefully tailoring our services to each client’s individualized needs.
Please visit our website at: www.pinnacle-advisory.com
Allison R. Fogarty
Pinnacle Advisory Group
3030 North Rocky Point Drive
Tampa, FL 33607
(813) 350 7969