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Several major developments, the continued expansion of area business, and a burgeoning tech start-up industry are positively affecting the greater St. Louis economy and hotel demand. Meanwhile, the supply base of existing hotels has been pared down and revitalized. The combination of these trends has buoyed area hotel values in recent years. In fact, hotel supply has decreased overall since 2011, as older, obsolete properties, such as the former 700-room Millennium, exited the market. Supply levels dipped slightly in 2015, but are expected to begin increasing in 2016 with the recent and ongoing development of multiple limited- and select-service hotels in several suburban submarkets; however, supply growth in the urban core is likely to remain in check, with only a handful of relatively small boutique hotels currently on the drawing board. Thus, as demand fundamentals remain positive, the market should continue to realize positive RevPAR growth. From a valuation standpoint, however, the anticipated operational gains are expected to be somewhat offset by anticipated trends in the capital markets. Further value appreciation is expected to be held in check in the near term, as interest rates and capitalization rates have begun to rise.
READ MORE ABOUT THE 2016 ST. LOUIS HOTEL VALUATION INDEX AND 70 MARKETS NATIONWIDE.
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