In March 2025, the trailing twelvemonth occupancy rate was 70.3% for the overall Seattle market
Demand in the Seattle CBD submarket continues to improve aided by a surge in leisure travel and the significant increase in conventions as a result of the increase in convention center capacity. With continued growth in demand and a relatively stable supply plus rising room rates, we expect that hotel
performance will continue to steadily improve although at a slower rate than in the past three years. However, there is uncertainty surrounding weakening economic conditions and the impact of tariffs.
The extent of continued recovery in the overall Seattle hotel market is demonstrated by Q1 2025 results reflecting continued improvement prior years since the start of the pandemic in 2020. Immediately prior to the pandemic, trailing twelve-month occupancy was 73.5% in Q1 2020 which fell to a low of 32.6% in February of 2021.
Overall market occupancy improved to 55.8% in Q1 of 2022, to 67.5% in Q1 of 2023 and to 68.3% in Q1 of 2024. ADR fell from $160 in January 2020 to $90 in March of 2021 with the onset of the pandemic. ADR has since consistently improved notching $182 in Q1 2025. This translates to a significant increase in RevPAR from $30 in Q1 2021 to $128 in Q1 2025. This is above the RevPAR of $118 in January 2020 just prior to the pandemic.
In Q1 2025, there were three sales of hotels in the greater Seattle market with prices exceeding $5,000,000. This includes the sale of the 240-room Embassy Suites by Hilton in Lynnwood for $75,000/room and the Red Roof Inn in Seatac for $88,816/room. The 302-room Residence Inn in Seattle sold for an undisclosed price and is subject to a long-term ground lease. Transaction volume fell with the rise in the interest rates but appears to have stabilized with capitalization rates averaging about 8.7% market-wide.
Three hotels are now under construction ranging in size from the 126-room LivAway Suites in Renton up to the 165-room Somm Hotel and Spa, a full-service hotel associated with Autograph Collection and located in Woodinville. New hotel deliveries will result in modest new supply primarily in Seattle and Eastside suburban areas in 2025.
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