Dallas Hotel Development: A Success Story Amid the Pandemic Recovery

Everything is bigger in Texas, even the post-pandemic recovery. Hotel metrics are showing strong improvements, and convention demand should be further bolstered in the future by a new convention facility. As a result, new hotel construction is again vibrant across the Metroplex after a temporary slowdown during the pandemic.
Kathleen D. Donahue

Dallas Hotel Metrics

Within the hotel and lodging sector, Dallas’s popularity with visitors and its ability to attract new businesses have contributed to an unhesitating redemption. In the wake of the COVID-19 pandemic, revenue per available room (RevPAR) in the greater Downtown Dallas area for 2022 rebounded to levels similar to 2019; however, the year-to-date period ending February 2023 shows RevPAR exceeding prior peak levels, as illustrated in the Kalibri Labs data below.
Historical Lodging Metrics – Aggregate Downtown and Dallas Airport Submarkets
Source: Kalibri Labs
As occupancy levels remained below pre-pandemic levels owing to a sluggish business travel recovery, the RevPAR increase was largely driven by a significant upswing in average daily rate (ADR), fueled by greater levels of high-rated leisure demand and an increase in upper-upscale and luxury full-service inventory in the greater Dallas market.

Tourism and Convention Demand Segment Factors

According to Craig Davis, CEO of VisitDallas, the tourism/hospitality industry is the tenth-largest industry in Dallas, and total visitor volume and spending are expected to fully recover to their pre-pandemic levels by the end of 2023. A significant number of attendees at citywide conventions and other special events contribute to the total visitor volume. Dallas has long been a popular convention destination, and the post-pandemic rebound in Dallas has been swift and strong.
Shaping the future of the convention market in Dallas, a plan to build a new, expanded, almost $3-billion convention center was approved by voters in November 2022. The existing Kay Bailey Hutchison Convention Center is aging and does not offer all of the facilities and amenities that meeting planners prefer. Construction of the new 2.5-million-square-foot center is projected to occur from 2024 to 2028.
Per preliminary plans of the new facility, the amount of exhibit space will increase modestly from the existing center, but meeting space will double and ballroom space will triple—resulting in the new facility being about 500,000 square feet larger than the existing center. The project will also include rotating the center’s orientation clockwise approximately 90 degrees, creating a deck park over Interstate 30, improving connectivity, and increasing development potential among Downtown Dallas, the Cedars neighborhood, and South Dallas.
Rendering of New Convention Center
Source: VisitDallas

Commercial Demand Segment Factors

Along with being a popular convention destination, Dallas is home to two major airports and boasts a diverse, business-friendly environment. The city is one of the world’s leading choices for corporate headquarters. Furthermore, airport traffic at both Dallas Love Field Airport and Dallas/Fort Worth International Airport registered at more than 95% of 2019 levels for year-end 2022. Rising inflation costs and efforts to control expenses remain threats to business travel, and while the office market has been slow to recover, work-from-home practices are increasingly migrating to hybrid models that require some office attendance. As such, business travel is rebounding, although the pace is somewhat irregular.

Hotel Development and Renovations

As ADR growth buoyed the RevPAR recovery, it is important to recognize several recent and planned high-end hotel projects, as well as major renovations, that are expected to spur additional rate growth and elevate the greater downtown area’s lodging supply.


Greater DFW Area
Outside the Downtown Dallas core, the northern suburban area remains a hotspot for new construction, particularly in Frisco and Plano. Most notably, PGA of America recently completed construction of its headquarters in a 600-acre, mixed-use development in Frisco's North Platinum Corridor. After the area welcomed the Omni Frisco Hotel and the Renaissance Dallas at Plano Legacy West in 2017, a 303-room Hyatt Regency opened in 2020 at the Stonebriar Centre shopping mall. Multiple mixed-use developments are planned or under construction near the PGA site or near the State Highway 121/Dallas North Tollway interchange, including within Plano and The Colony. Many of these developments are planned to include upper-upscale or luxury hotels. Recently announced projects include a Ritz-Carlton and Autograph Collection by Marriott at Fields West, a Dream Hotel at Firefly, and HALL Park’s Autograph Collection Hotel. Furthermore, a sampling of notable full-service hotel projects in the greater DFW area is listed below.

Grapevine Southlake Fort Worth Roanoke
  • A 266-room Peabody Hotel and Convention Center is planned for a site next to Roanoke's city hall.
Rowlett Las Colinas/Irving Arlington

Looking Forward

The outlook for the greater Dallas area is optimistic as the region continues to offer an inviting business climate that encourages growth in all sectors. Although occupancy levels remain below 2019 levels, average rates in the Metroplex have increased significantly since the low point in 2020, with market ADR reaching a new all-time peak. Commercial and group demand increases are expected to accelerate throughout 2023. Overall, the Dallas lodging market is well positioned for long-term growth.
For more information, contact Kathleen Donahue of the HVS Dallas office.
Kathleen Donahue is the Senior Managing Director and Practice Leader overseeing the West South Central region of the U.S. Kathleen joined HVS from Radisson operations in Austin, following graduation from The University of Texas at Austin. She is licensed as a certified general appraiser in Texas and surrounding states and has particularly strong knowledge of hotel markets in Texas, Oklahoma, Arkansas, and Louisiana. Contact Kathleen at +1 (972) 890-3548 or [email protected].


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