Occupancy gains and steady revenue growth. That’s what Marcus & Millichap is predicting for the hospitality sector throughout the upper Midwest states of North Dakota, Minnesota, South Dakota, Nebraska, Iowa, Wisconsin and Illinois.
North Dakota, in particular, is poised to see big occupancy gains this year, according to Marcus & Millichap’s 2019 Upper Midwest Hospitality Report. Credit rising oil prices, and the oil workers this is bringing to the state, for this increase.
Marcus & Millichap reported that the state saw a 150-basis-point increase in 2018, the first rise in North Dakota’s occupancy rate since 2011. Marcus predicts that this trend will continue as oil prices rise and more tourists visit North Dakota to take advantage of its recreational activities.
There’s good news for Nebraska and Wisconsin, too, which Marcus & Millichap says are also on the rebound when it comes to hotel occupancy gains.
In other regional highlights, Marcus & Millichap reported that last year roughly 57.6 million people visited Chicago, up more than 4 percent from the prior year. Revenue per available room, better known as RevPAR, grew more than 5 percent in Chicago last year.
Developers recognize that the upper Midwest is a strong one for hotels. Marcus & Millichap reports that nearly 12,000 hotel rooms are under construction in this region now, with Illinois and Minnesota receiving roughly half of all completions. An additional 8,700 rooms will break ground regionally in the next 12 months, according to Marcus & Millichap.
The region’s occupancy rate should jump to 60.4 percent this year, Marcus reports. That is up 30 basis points, and follows a 70 basis points jump in 2018.
