IRR-Fort Worth Mid-Year Viewpoint 2015 Local Market Report - Lodging
Fort Worth is a desirable location for conventions and tourism, and a center for business and industry in the region, which drives the demand for lodging. The improving economy and expansion of business to the Fort Worth metro area have helped to drive increased occupancy among both full-service and limited-service hotel properties. Current occupancy and average daily rates are at the highest levels in the last five years. Occupancy is expected to increase slightly in the second half of 2015 and demand should continue to push daily average rates slightly upward.
Cap rates remained relatively flat for the last quarter and are expected to see little variation as this year goes on. Similarly, discount rates saw little movement in the last quarter and any variation over the remainder of the year is expected to be minimal. Notable new and planned development in the lodging sector includes a hotel with conference space within Alliance Town Center in North Fort Worth. Additionally, the Fort Worth City Council approved a new arena in the Cultural District and future plans call for the addition of thousands of hotel rooms to help increase national convention business.
In Southlake, a 175 room hotel is planned for 2016 with 5,000 square feet of meeting space, a bistro, and a fitness center. The West Seventh Street corridor continues to develop and future plans include a six-story hotel as part of the Museum Place expansion. With the strengthening economy, lodging demand generators such as Downtown Fort Worth, the Stockyards, Texas Motor Speedway, Six Flags amusement parks, AT&T Stadium, and Globe Life Park in Arlington tend to attract even higher numbers of visitors, increasing the demand for hotel space. The strength of the local economy and the expansion of business in the region will continue to drive the demand for lodging in Fort Worth.