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Market Report

Seattle-Tacoma Hospitality Market Report

2023 Investment Forecast

New Events and Entertainment May Shift the Tide for Downtown Hotels;
Buyers Target Economy Assets

Performance improving in most areas; CBD lagging. Optimism is building in Seattle-Tacoma’s hospitality sector. Major events, such as the NCAA Division 1 Women’s Basketball Tournament Regional, and returning festivals, such as Bite of Seattle, will help attract more visitors than in recent years, lifting 2023’s occupied room night count to within 1 percent of the record high. International tourism is also likely to ramp up, with China loosening travel restrictions this January. More than 175,000 of the country’s nationals visited in 2019, and pent-up demand could bring similar levels back to the market this year. In spite of these tailwinds, overall occupancy is expected to remain below pre-pandemic levels, with the local rate in downtown Seattle — an area that hosts one-third of total inventory — holding 1,400 basis points under its 2019 recording. The widespread adoption of hybrid work formats, paired with recent, large-scale layoffs by the metro’s largest firms, are hindering business travel to the core and local hotels’ recovery. Still, the outlook here may be improving. Downtown’s newly-built convention center, Summit, has already booked 21 events for 2023 — each with a minimum estimated attendance of 4,000 people. Meanwhile, Pier 62 at Waterfront Park opens several new amenities, such as the Habitat Beach, this year.
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