- $214 Avg.
Daily Hotel Cost
- $47 Avg.
Daily Car Rental
- $88 Total
Daily Meal Cost
- -12% % Cost Change from Q3 2024
Elevate Your Negotiation Game: Nashville’s hotel
industry is hot right now, and developments are coming online fast. New
properties increase competition and may offer introductory rates to corporates
in order to attract volume from the get-go, grab some quality market share and
establish long-term partnerships.
The Approach: Small and midsize buyers are smart to
go directly to targeted properties or possibly a hotel management company that
may have multiple brands in its portfolio or have new properties coming online.
Keep In Mind: The Nashville opportunity window may
not last long. The city is building a major sports stadium by 2027 to attract major
events. An airport expansion is under consideration as well and the convention
center is looking at expansion feasibility plans.
What’s Happening in Nashville?
Nashville has experienced a hotel boom over the past 10
years, but especially following the pandemic, hotel developers seem not to be
able to get enough of the city. While the luxury and upper-upscale market finally
dropped pins in the city in 2021 and 2022—Marriott’s Luxury Collection,
Hilton’s Conrad and the The Four Seasons have all called the city home since
exiting the pandemic—the current market is heavy on upper midscale hotel
development, according to hotel market data firm STR.
Music City has approximately 40,000 hotel rooms currently in
operation and 13,000 in different stages of the development pipeline. And
properties come online fast in this town. Nashville welcomed more than 2,200
hotel rooms in 2024 and the market in 2025 is projected to absorb close to
3,000 more. After New York—which has more than 5,700 rooms in the
pipeline—Nashville has the strongest pipe of any city in the United States.
It’s a signal that leisure, business and meetings/group demand has been hopping
in this Southern hotspot.
That said, business travel costs in the city seem to be
moderating. From Q3 2024 to Q4 2024, daily business travel costs fell nearly 12
percent across hotel and car rental costs—mostly driven by a drop in average
hotel rates, which peaked in the third quarter of 2024 at $257 per night for a
business traveler, but then fell in Q4 to about $214. The final quarter is
annually somewhat softer for business travel rates than the third quarter, but
the year-over year comparison of CTI data for the same period also found
Nashville down almost 5 percent in daily business travel costs.
It’s a situation not lost on the city’s Convention &
Visitors Corporation, which has acknowledged the challenge of keeping visitors
flowing into the city to fill hotel rooms, convention centers and recreation
sites.
“You don’t want to get to the point where you can’t absorb
the supply but it’s bound to happen at some point, which is why we have to get
creative and just keep coming up with ideas and ways to bring people to town,”
CVC president and CEO Deanna Ivey told local NewsChannel 5 in June. “We have to
be creative. We’re competing with every destination in the world,
honestly," said Ivey. "So we have to make sure Nashville is out
there, upfront, top of mind and people want to come here for a reason.”
Ivey said business travel in the city continues to ramp up
and is expected to do so even more in 2025.
Not Just Hotels
If there’s one city that gets creative with attractions it’s
Nashville, but there are a few developments on the horizon that promise to fill
hotel rooms in the near future and on a regular basis.
Nashville is currently constructing a domed sports arena to
replace the current Nissan Stadium. The New Nissan Stadium is scheduled to come
online in 2027 and is a public-private partnership among the Tennessee Titans
NFL football team, the State of Tennessee and the Metro Sports Authority. It
will attract major sporting events like the Superbowl and the NCAA Final Four,
according to city officials.
The NCVC is working hard to attract new visitors and has
appealed to international destinations to consider Nashville as a non-stop route.
Iceland Air, Aer Lingus and Air Canada will begin new service to the airport or
expand existing service in 2025. Nashville International Airport has proposed
an airport expansion that would rebuilt concourse A and expand concourse D,
which came online in 2020 mainly to serve Southwest Airlines, which is also
expanding its service in and out of Nashville. The city’s convention center
Music City Center has also commissioned a study for a possible expansion,
though the facility is only 12 years old.
For those looking for a good time, Nashville Yards, a new
entertainment gateway to downtown Nashville is scheduled to open this spring.
The Grand Hyatt Nashville and Union Station Nashville Yards will anchor the
development and represent 1,000 hotel rooms for the city’s hospitality
portfolio. The new Storyville Gardens theme park is scheduled to open this year
as will at least two large music and entertainment venues.