Seattle Hotel Market Report

3rd Quarter 2021

Posted In — Market Research | Market Report

It was a good summer! With vaccinated parents and restless kids, this clearly was the right time for a vacation.

Room occupancy rates increased in every market surveyed, and often by substantial margins. In some outlying communities, lodging demand in the third quarter actually exceeded the volume captured for the same period in 2019, prior to the pandemic. While most urban markets have yet to return to pre-pandemic occupancy, the recent results are very positive.

The surge in demand was heavily weighted toward leisure travel. So what happens when school resumes and the summer tourists head home? Ordinarily, it is commercial guests who pick up the slack through the remainder of the year, supplemented by conventions and other groups in the spring and fall. This year, with many businesses limiting travel and with convention activity still ramping back up, the pace of recovery in the coming months may be slower.

One hotel opened during the third quarter. The Element in Tukwila is an extended stay property with 177 guestrooms, each with a kitchen. Work continues on hotels in the Seattle CBD, South Lake Union, Bellevue, South Tacoma, and Marysville. After a hiatus of nearly two years, developers are starting to pursue new hotel projects, though none have as yet broken ground.

The upscale AC by Marriott in Downtown Bellevue sold for the second time in three years, and at the same price. The developer of two Woodspring Suites extended stay hotels sold both properties in September. That same month saw the sale of Hotel Seattle, a 78-room vintage property in the Seattle CBD. In South Tacoma, three limited service hotels were purchased as going concerns, one was acquired for conversion to apartments, and one is to be repurposed as transitional housing.

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