Metro Atlanta is one of the Southeast United States’ premier metropolitan areas and strongest hotel markets. The market is broken up into seven primary submarkets, containing central and suburban areas: Downtown, Midtown, Buckhead, Airport, Galleria/Marietta, Chamblee/Norcross and Perimeter Center/Roswell.
The Atlanta hotel market’s biggest in-state competitor is Savannah, while its other major regional competitors include Chattanooga, Tennessee, and several major cities in Florida, such as Orlando.
The market has rebounded strongly from the economic downturn, as evidenced by strong annual increases in occupancy, average daily rate and revenue per available room. By the end of 2015, the market is predicted to experience strong growth across all classes, particularly in economy and upscale properties.
Hotel trends in metro area
There are 792 properties with 94,118 rooms in the market of Atlanta as of April, according to STR.
In general, the hotel industry has seen some solid growth this year. According to April 2015 figures from STR, Atlanta’s year-to-date occupancy rate was 71.2%; ADR was $96.70; and RevPAR was $68.83. All three metrics showed improvement over 2014, with 4.8% growth in occupancy, 5.6% growth in ADR and 10.7% growth in RevPAR.
In recent years, the market’s growth of demand in the city has significantly outpaced the growth of supply, according to data from STR. As a result, revenue grew 6.6% in 2012, 6.2% in 2013 and 13.2% in 2014.
Benefiting from the strong demand, RevPAR growth is robust when looking at STR data. The market’s RevPAR growth rate clocked in at 13.1% in 2014. This strong growth is forecasted to continue this year, with year-end RevPAR predicted to show at $67.06.
>Market segmentation
Transient travelers account for approximately 60% of room sales in Atlanta, according to STR, which has resulted in healthy ADR and demand growth in recent years. In the past decade, transient sales slowly increased, stealing share from group sales.
While transient demand change remained positive in the last five years, group demand fluctuated greatly, experiencing monthly growths close to 30% in 2012 and drops nearing 20% in 2013, according to STR. Group sales make up approximately 36% of Atlanta’s room sales, leaving about 3% of rooms sold at rates stipulated by contracts, including airline crews and permanent guests.
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