A surge of 1,200 new hotel rooms is expected hit the Detroit market in 2025, according to the latest research from Marcus & Millichap.
In its Detroit Hospitality Investment Forecast Report for this year, Marcus & Millichap says that 2025 should be a busy year for the area’s hotel market.
“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.
According to Marcus & Millichap’s report, the influx of 1,200 new hotel rooms coming online in 2025 will make this the second-largest annual supply increase in five years, with much of the development concentrated in downtown Detroit and Dearborn.
Thanks largely to this boost in rooms, Marcus & Millichap predicts that the Detroit-area hospitality occupancy rate is expected to dip slightly to 59% this year. According to the report, full-service hotels are expected to see the largest occupancy gains this year.
In other positive news, Marcus & Millichap says that the average daily rate (ADR) for the Detroit hospitality sector 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 expected to reach a record high of $74.40 in 2025, driven by the higher room rates throughout the Detroit market.
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, Marcus & Millichap said in a press release.
“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.
