Figure 1 : Changes in Large MSA Hotel RevPAR by Submarket Location , 2018 to 2024
Period 1 2018:2-2019:3 Period 1 2018:2-2019:3 Periods Δ MSA / Submarket RevPAR $ (% of Total ) Total CBD Adjacent Outlying Total CBD Adjacent Outlying Total Δ CBD Δ Adjacent Δ Outlying Δ New York $ 214,57 $ 216,71 $ 240,83 138,05 $ 255,51 $ 258,60 $ 289,98 $ 169,42 19,1 % 19,3 % 20,4 % 22,7 % Chicago $ 107,33 $ 163,69 $ 87,80 64,07 $ 112,00 $ 166,06 $ 93,08 $ 67,94 4,3 % 1,4 % 6,0 % 6,0 % Atlanta $ 81,66 $ 137,02 $ 80,71 60,01 $ 85,67 $ 133,44 $ 79,05 $ 66,50 4,9 % -2,6 % -2,0 % 10,8 % Los Angeles $ 142,53 $ 158,20 $ 145,48 103,15 $ 150,82 $ 156,49 $ 152,16 $ 112,35 5,8 % -1,1 % 4,6 % 8,9 % Washington DC $ 125,09 $ 172,39 $ 112,47 82,31 $ 137,17 $ 186,79 $ 129,04 $ 91,05 9,7 % 8,4 % 14,7 % 10,6 % Dallas $ 78,97 $ 114,62 $ 54,96 68,36 $ 90,28 $ 130,18 $ 63,92 $ 79,12 14,3 % 13,6 % 16,3 % 15,7 % Houston $ 66,58 $ 97,20 $ 72,04 55,22 $ 76,77 $ 105,49 $ 80,57 $ 64,85 15,3 % 8,5 % 11,8 % 17,5 % Phoenix $ 87,06 $ 97,08 $ 80,87 65,50 $ 110,56 $ 120,48 $ 104,28 $ 87,05 27,0 % 24,1 % 28,9 % 32,9 % San Diego $ 132,25 $ 173,97 $ 98,27 114,12 $ 157,62 $ 192,72 $ 122,70 $ 145,16 19,2 % 10,8 % 24,9 % 27,2 % Miami $ 130,21 $ 152,94 $ 113,77 73,97 $ 153,35 $ 175,71 $ 149,32 $ 82,17 17,8 % 14,9 % 31,2 % 11,1 % Boston $ 161,55 $ 242,67 $ 187,62 101,54 $ 179,27 $ 247,63 $ 206,56 $ 116,65 11,0 % 2,0 % 10,1 % 14,9 % Nashville $ 116,54 $ 195,04 $ 82,04 66,98 $ 128,15 $ 197,48 $ 82,54 $ 72,52 10,0 % 1,3 % 0,6 % 8,3 % San Francisco $ 204,39 $ 219,51 $ 164,35 158,97 $ 146,40 $ 149,81 $ 120,24 $ 148,47 -28,4 % -31,8 % -26,8 % -6,6 % Average of Top 13 Markets $ 126,83 $ 164,70 $ 117,02 $ 88,63 $ 137,20 $ 170,84 $ 128,73 $ 100,25 10,0 % 5,3 % 10,8 % 13,8 %
Notes : Two of the 15 markets were removed from the sample . Orlando ’ s CBD market has an extrodinarly small number of rooms . The Denver outlyling submarket data are incomplete . Sources : CBRE Hotels Research , Hotel Horizons ,® Kalibri Labs
findings indicate that CBD submarket RevPAR weakened relative to non-central city submarkets in more than one-half of the MSAs studied , likely due to relocations of economic activity .
The study divided the past six years into two periods : pre-pandemic ( Q2 2018 – Q3 2019 ) and post-pandemic ( Q2 2023 – Q3 2024 ). The three years between 2020 and 2022 were intentionally left out to avoid capturing temporary hotel closures during that time . The RevPAR averages of quarterly data during the two periods are utilized to account for seasonal variation .
The average number of hotel rooms across the sample of 13 MSAs is wellbalanced among the three submarket location types at about 30 % each . However , in some MSAs , the percentage of all hotels in the CBD submarket exceeds 50 % ( New York , Chicago , Miami and San Francisco ) while in others , this is less than 20 % ( Atlanta , Los Angeles , Dallas , Houston and Phoenix ).
Inflation , which rose more than 20 % between 2018 and 2024 , influenced nominal RevPAR changes across the board , but suburban markets have shown a clear edge .
Figure 1 presents findings from comparing submarket RevPAR performance in the 13 MSAs from Period 1 to Period 2 .
The following observations come from an examination of the far-right section of the figure : � The average submarket RevPAR changes for 13 MSAs are CBD = 5.3 %, Adjacent = 10.8 % and Outlying = 13.8 %. All MSAs except San Francisco experienced RevPAR growth across all or most submarkets ( recall these are nominal dollars after several years of rapid inflation ). � In Dallas , New York and Phoenix , RevPAR growth was comparable in all three submarkets . � In Atlanta , Los Angeles and San Francisco , CBD submarket RevPAR change was negative . � In five of the 13 MSAs ( Boston , Chicago , Houston , San Diego and Washington , D . C .), the CBD submarket RevPAR grew , but by considerably less than adjacent and outlying submarkets . � In two MSAs , Miami and Nashville , the CBD submarket outperformed either the adjacent or outlying submarket .
These findings point to a shift in economic activity and traveler preferences , reshaping demand in favor of suburban markets . The hotel markets in large American cities were not spared from the geographic adjustments of businesses and households during the pandemic period . RevPAR in the CBD submarket remained the highest in absolute terms but underperformed relative to adjacent and outlying submarkets . In most MSAs studied , the CBD submarket RevPAR was negative or slightly positive , while the other submarkets experienced substantial growth .
Whether these trends continue throughout this decade depends on several factors , including the policies of CBD businesses limiting remote work becoming more widespread and effective measures taken to ensure safe working , living and tourism environments . The only question left is how — and when — the CBD comeback will unfold ?
Mar / Apr 2025 hotelsmag . com 25