Midwest Metros Invest in Event Space; Buyers Look Outside Main Cities
More people travel to region for business functions and large-scale celebrations. Hotels in the seven-state region of the Upper Mid-west performed well this past year as more individuals traveled to the area to attend major events. The most notable occasion, the Super Bowl, oc-curred in Minneapolis-St. Paul earlier this year. The corresponding boost to occupancy and ADR will contribute to RevPAR growth for the state at large. Chicago is coming off a record-setting year for tourism at more than 55 million visitors, supported by several events held in the city’s con-vention center, McCormick Place, which set multiple attendance records. The trend is likely to continue as a connected hotel will open in 2018, ex-panding available event space and rooms. Hotels adjacent to convention centers in Des Moines and Omaha are also opening this year. This will enable both metros to host larger events with more amenities to attract attendees and rooms to host them. Such demand-side gains will result in more states reporting positive occupancy and ADR growth this year.
Among many choices, upper midscale properties trade often. A variety of market sizes and a large collection of brand-affiliated hotels at different chain scales provide a wide array of options for investors. Large and medium-scale cities such as Chicago and Minneapolis-St. Paul offer opportunities to acquire anything from a full service hotel to an econo-my brand. Buyers from the Southwest and West Coast often complete transactions in these urban centers. However, a majority of recent trades took place outside the most prominent hotel markets, with the second-ary markets of Wisconsin and Illinois especially popular. In 2017 approx-imately the same number of independent, limited service and select-ser-vice establishments changed hands, denoting an increase in deals of upper midscale assets compared with the previous year.
