Marcus & Millichap

Upper Midwest Hospitality Forecast

First Half 2019

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Rebounding Hotel Demand Supports Occupancy Growth Throughout Region

Improving oil markets bode well for hotel performance in the Upper Midwest. Healthy room demand throughout the majority of states in the Upper Midwest will support a second year of occupancy improvement and steady revenue growth. Rising oil prices over the past several months affected multiple states in the region that have relied on workers filling hotel rooms. North Dakota, in particular, is leading regional occupancy growth. The state registered a 150-basis-point increase in 2018, the first uptick in the rate since 2011. The trend should continue as oil prices rise and tourists visit the state for its numerous recreational actives. Nebraska and Wisconsin are also on the rebound, with both states likely posting another year of occupancy advancement after the rates fell or remained flat in 2017. These improving conditions will bode well for overall hotel property performance in the region, just under the national average rates of ADR and RevPAR growth this year.

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