Outlook on Market Occupancy and Average Rate
The expansion of Baltimore’s corporations, healthcare systems, and government operations should drive additional hotel demand, especially as the economy continues to strengthen. Occupancy gains may be moderated, however, in areas of significant hotel supply growth. Average rate should rise as lodging demand increases; new high-quality supply should support further average rate growth for the city as a whole.
Recent Hotel Transactions
The most recent hotel transactions in the Baltimore area have been of the Lord Baltimore Hotel, the Brookshire Suites Baltimore, and the Holiday Inn Baltimore Inner Harbor Downtown. The Lord Baltimore Hotel operated as a Radisson at the time of sale but is planned to remain independent; the buyer, Miami-based Rubell Hotels, began renovations to the lobby and public areas following the sale, and guestroom renovations are expected to be completed by early 2014. The Brookshire Suites Baltimore was purchased by Modus Hotels in September of 2012 as a distressed asset. The Holiday Inn Baltimore Inner Harbor Downtown was distressed at the time of sale and will remain branded as a Holiday Inn and be managed by ownership.
The expansion of private- and public-sector entities, along with the city’s tourism and convention base, should provide a strong platform for further economic and hotel performance growth. Some challenges remain, especially with respect to the progress of national economic recovery. While the duration of the federal government shutdown is unknown, its effects will likely prove detrimental to area businesses and hotels, which typically receive heavy patronage from the government demand segment. Overall, however, recent advances in employment and the promise of additional leisure demand help support an optimistic outlook for the Baltimore market in the coming years.
This report was compiled with data from HVS and contributed by Chelsey Leffet and Nicole Ortiz, HVS Philadelphia.
Photo credit: Downtown Baltimore via Bigstock