Detroit Hospitality Market Report

New hotels in the market’s lowest occupancy area could hinder progress. The trajectory of Detroit’s hotel sector recovery has been largely middle-of-the-pack for the Midwest. Relative to 2019 figures, the metro’s occupancy rebound is comparatively stronger than Chicago and Minneapolis-St. Paul, but falls short of most other major tertiary markets in the region. Similarly, Detroit’s pace of ADR growth since the pandemic’s onset measures as the third slowest in the Midwest, beating only Cincinnati and Cleveland. Those relative ranks are set to remain consistent during 2023, as the market faces greater pressure from new construction. Detroit’s rate of supply expansion is projected to be the 12th-fastest nationally this year and includes a trio of projects that will deliver a combined 500 rooms in the urban core, most of which are upscale or upper upscale. This presents near-term hurdles for the Detroit-Dearborn submarket, which had the lowest yearlong average occupancy rate in the metro last year. Renovations to Huntington Place convention center among other urban revitalizations, however, signal longer-term hotel demand tailwinds downtown. Remaining completions in 2023, meanwhile, should be well-dispersed in northern suburbs.