Login

Seattle Hotel Market Report

4th Quarter 2024

Posted In — Market Research | Market Report

In December 2024, the trailing twelve-month occupancy rate of 70.4% for the overall Seattle market was still below pre-pandemic occupancy levels but steadily improving.

Demand in the Seattle CBD submarket continues to be hampered by a lack of business travel compared to prepandemic levels. 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. The extent of continued recovery in the overall Seattle hotel market is demonstrated by Q4 2024 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 53.1% in Q1 of 2022, to 67.2% in Q4 of 2023 and to 70.3% in Q4 of 2024. ADR fell from $160 in Q1 2020 to $100 Q1 2021 with the onset of the pandemic. It has since consistently improved notching $178 in Q4 2024.

This translates to a significant increase in RevPAR from $35 in Q1 2021 to $128 in Q4 2024. This is above the RevPAR of $118 in January 2020 just prior to the pandemic. Some downtown hotels still continue to underperform weighed down by continued low office occupancy and a related reduction in business travel. However, most suburban hotel occupancy rates are at or near pre-pandemic levels, and room prices have increased rapidly in the overall market and all submarkets. With limited growth in supply, completion of the convention center expansion, continued cruise ship visitor growth, and Seattle being one of the host cities for the 2026 FIFA World Cup, the expectation is for continued steady growth in demand.

In Q4 2024, there were 5 sales of hotels in the greater Seattle market with prices exceeding $5,000,000. This includes the sale of the 97-room Kimpton Palladian for $436,628/room. Transaction volume had fallen with the rise in the interest rates but appears to be on the rise again. Capitalization rates rose significant but have stabilized and now average about 8.6%.

Six hotels are now under construction ranging in size from the 120-room boutique Hotel Westland in the Pioneer Square neighborhood of Seattle up to the 223-room Trademark Collection, a limited-service hotel in Redmond. New hotel deliveries will result in modest new supply primarily in Seattle and Eastside suburban areas in 2025 or 2026.

Click here to subscribe to Kidder Mathews market research.

Share This Report