Expect a surge of new hotel rooms to open in the Detroit market this year, an influx of hospitality space that should help meet a growing need in the area.
That’s one of the key takeaways from Marcus & Millichap‘s 2025 Detroit Hospitality Investment Forecast Report released earlier this month.
According to the report, Detroit’s hospitality sector is poised for an especially busy year in 2025 as developers add more rooms to the city’s downtown and suburban areas.
“Detroit’s hospitality sector is undergoing a transformational year in 2025, with strong long-term fundamentals powered by strategic infrastructure developments and revitalization efforts,” said Steven Chaben, senior vice president and regional manager with Marcus & Millichap.
Some of the key findings in Marcus & Millichap’s report include:
• A surge of 1,200 new hotel rooms coming online in 2025 makes this the second-largest annual supply increase in five years, with development concentrated in downtown Detroit and Dearborn.
• Occupancy is forecast to dip slightly to 59% because of the increase in new rooms, though full-service hotels are expected to see the largest occupancy gains.
• Average daily rate is projected to increase to $126.16, with economy hotels achieving the largest price gains as demand begins to rebound after last year’s decline.
• Despite modest occupancy declines, RevPAR is set to reach a new record high of $74.40 in 2025, driven by the improving ADR environment.
• The metro’s average price per room exceeded pre-pandemic levels in 2024, and continued investor interest is fueled by Detroit’s relatively low entry costs and strong yield potential compared to other major U.S. markets.
“New infrastructure like the Gordie Howe International Bridge, institutional expansions, and a growing pipeline of marquee events are converging to make Detroit a rising star in Midwest hospitality,” said Chaben.
